WASHINGTON, D.C. – As the U.S. Senate considers the nomination of key posts for the Federal Reserve System, Senator Bob Menendez (D-N.J.), a senior member of the Senate Banking Committee and the highest-ranking Latino in Congress, this week questioned Chair Jerome Powell and Governor Lael Brainard on the state of the economy, incentivizing investments in minority communities, and increasing diversity at the Fed. Powell, currently Chairman of the Fed’s Board Governors, was nominated by President Biden for a second term. Brainard, currently a Governor of the Board, has been nominated to be Vice Chair of the Federal Reserve Board.
“There is a serious diversity problem at the Federal Reserve. Latinos are this country’s largest minority and make up nearly 20% of the U.S. population. It’s outrageous that they have no representation in Fed leadership. There has never been a single member of the Board of Governors or regional bank president that has lived the experience of being a Latino in the United States,” said Sen. Menendez to Chair Powell before urging him to take concrete steps to improve minority representation at the Fed. “That means that the voices of one-fifth of country’s citizens are repeatedly drowned out when the Fed is making critical decisions on economic policy – decisions that affect whether a Latino family can afford their first home, find a job that pays a living wage, send their children to college, save for a comfortable retirement, or get a loan to expand their business.”
Sen. Menendez secured a commitment from Governor Brainard, should she be confirmed to be Vice Chair of the board, to prioritize developing a strong new rule to further incentivize investments in minority communities hurting from the disproportionate impact of the COVID-19 pandemic under the Community Reinvestment Act (CRA) of 1977. The CRA requires the Federal Reserve and other federal banking regulators to encourage financial institutions to help meet the credit needs of the communities in which they do business.
“Minority communities are hurting right now and this needs to be a priority. The pandemic has brought to light how severe the lack of credit and investment dollars problem is for minority small business owners, and it’s past time for our regulators to work together and issue an updated and effective CRA rule,” emphasized Sen. Menendez.
Last October, Sen. Menendez led an effortto urge Chair Powell to work closely with the Boston and Dallas Boards of Directors and search committees to find and select diverse candidates, especially Latino candidates, to bring much needed diversity to the highest executive levels of the Federal Reserve System.
Sen. Menendez is the author of the he Improving Corporate Governance Through Diversity Act of 2021, legislation that would address shortcomings in the U.S. Securities and Exchange Commission’s (SEC) diversity disclosure rule by requiring public companies to disclose information related to the racial, gender, ethnic makeup and veteran status of corporate boards and senior management.