Representative Maxine Waters (D-CA), the newly appointed Chair of the House Financial Services Committee (the “Committee”), took a first step last week towards one of the major priorities of the Committee under her leadership – the promotion of diversity and inclusion in the financial services sector. The first change under the new Chair’s watch was the creation of a new subcommittee to support this objective. Chair Waters’ other agenda items for the Committee continue to take shape, but she has previously indicated that her focus will be on, among other things, protecting consumers and investors from abusive financial practices, ensuring appropriate safeguards are in place to prevent another financial crisis, expanding affordable housing opportunities and tackling homelessness, and encouraging responsible innovation of financial technology.
The Democrats introduced the new House Financial Services subcommittee for diversity and inclusion in a package of rule changes passed by the House last week. The jurisdiction of the new subcommittee remains unclear, however, and no chairman has been named or members assigned. Indeed, the subcommittee does not yet appear on the Committee’s website.
Nevertheless, the subcommittee will likely focus on reducing discrimination in financial services and expanding access to a broader range of financial services for low- and moderate-income individuals and communities. In addition, industry observers expect a primary emphasis of the subcommittee to be on the underrepresentation of women and minorities on boards of financial institutions. One potential result could be a proposal that, if enacted, would require companies to disclose the gender and racial makeups of their boards.
Any proposed legislation by Rep. Waters and her fellow Democrats, however, would likely run into significant obstacles in the Republican-led Senate. Given the potential for legislative gridlock in 2019 as a result of the split Congress, Chair Waters will likely also utilize the Committee’s subpoena power (as she has suggested on multiple occasions) to increase public pressure on companies and regulators to support the Committee’s objectives.