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Democratic Members of the House Financial Services Committee reacted with disappointment over new findings released today by the Government Accountability Office (GAO) which show little increase in diversity of the financial services industry over the last 10 years. The GAO study was made public today at a hearing of the House Financial Services Subcommittee on Oversight and Investigations.

According to the GAO report released today: “Between 1993 and 2004, overall diversity at the management level in the financial services industry did not change substantially, but some racial/ethnic minority groups experienced more change in representation than others….Additionally, the EEO-1 data indicate that, within the financial services industry, certain sectors have a somewhat more diverse management-level workforce than others. For example, the EEO-1 data show that depository institutions, such as commercial banks, and insurance companies generally have a higher degree of representation by minorities or white women at the management level than securities firms.” [GAO-06-617, Overall Trends in Management-Level Diversity and Diversity Initiatives, 1993-2004].

Congressman David Scott said, “As an entrepreneur who attended the Wharton School of Finance, I understand the unique challenges facing minorities in financial services businesses. The GAO study clearly shows that recruitment and retention of minorities in the financial services sector does not reflect overall population numbers. More must be done to open the doors of opportunity to the rest of America.

“The federal government is not setting an example for providing opportunity for minority firms. We can just look at the no-bid contracts in Katrina-hit areas to see how minority-owned businesses are being overlooked. The over-reliance on out-of-state contractors has lead to significant waste, fraud and abuse, not to mention a missed opportunity for minority business owners,” continued Scott.

The GAO study was requested in February, 2005, by Congressman David Scott, Financial Services Committee Chairman Mike Oxley, Ranking Member Barney Frank, Oversight and Investigations Subcommittee Chair Sue Kelly, and Ranking member Luis Gutierrez to report on the status of diversity in the financial services industry.

An electronic version of the GAO report is available at http://www.house.gov/banking_democrats/GAODiversityReport.pdf.