Why Does Diversity In Banking Matter?
May is Asian-American and Pacific Islander Heritage Month, and all month long, Tell Me More will be speaking with game changers who trace their heritage to that part of the world. They're people who have made a difference in politics, culture, science and sports.
One of those game changers is Stuart Ishimaru. The longtime civil rights leader was just named head of the Office of Women and Minority Inclusion in the Consumer Financial Protection Bureau, the new government agency charged with overseeing banks, mortgage lenders and credit card companies. He's got a tough task ahead of him: measuring diversity in the financial world.
In an interview with NPR's Michel Martin, Ishimaru says he's tasked with looking out for diversity within his own agency, as well as the entire financial sector.
Even though he won't have regulatory authority over the hiring practices of banks and other finance companies, Ishimaru says, he needs to first start with the basics.
"You need to know what the parameters are," he says, "where the opportunities are, whether people are getting opportunities, both men and women, people of color as well. A lot of that is a missing element."
During the recent financial crisis, women and people of color were often not represented in Wall Street, banks and other financial institutions, he says, but they were impacted the most. That's why Ishimaru feels diversity in the financial sector is crucial.
"The more people you get who are diverse," he says, the better the "work product because there are different perspectives being brought to the table."
Ishimaru jokes that he always "wanted to do good guy work." But his passion for civil rights comes from his parents' experience in World War II. Before he was born, his Japanese-American parents were taken from California to Utah and placed in internment camps for the duration of the war.
"The whole issue of civil liberties, and civil rights being taken away during the wartime, always affected me," says Ishimaru. "That was a fundamental defining experience for me, and the chance to give back in my work is very important."
MICHEL MARTIN, HOST:
I'm Michel Martin and this is TELL ME MORE from NPR News. Coming up, you might have felt that sting when you didn't win that big lottery jackpot a few weeks ago, but our next guest says you might be better off without it. I know, hard to believe, but we'll hear why in just a few minutes.
But, first, we have a very different story about money and finance. You might know that May is Asian-American and Pacific Islander Heritage Month and, all this month, we decided to talk to game changers who trace their heritage to that part of the world. These are people who have made a difference in fields like politics, culture, science or sports.
And we want to start our series with a man who is filling a new role in the U.S. government. The Consumer Financial Protection Bureau is a new government agency charged with overseeing banks, mortgage lenders, credit card companies and so on with a particular focus on representing the interests of consumers - as the name implies.
And, as part of that mission, the agency has created the Office of Minority and Women Inclusion and the first person to fill that post is Stuart Ishimaru. He is a longtime civil rights leader and official and he is with us now.
Welcome. Thank you so much for joining us, and congratulations on the new post you just started.
STUART ISHIMARU: Just started. Absolutely.
MARTIN: And I should mention you're a former commissioner of the U.S. Equal Employment Opportunity Commission. You've also held down a former acting chair. You've held senior positions at the Justice Department and the Commission on Civil Rights.
So, clearly, you have had a longtime focus on civil rights. What do you hope to do in this job?
ISHIMARU: Well, this is a very exciting job because it's focused on a certain sector. It's focused on the financial services sector, both for banks and non-banks and we're going to take a close look to see how folks are doing in this area. And the beauty of this is that you get to focus. When I was at the EEOC, I got to focus on employment instead of civil rights writ large and that was fun.
And now, I get to focus on a sector that has had issues over the years and I think there are challenges in trying to figure out what's going on and how to actually do something about it.
MARTIN: The creation of your agency was mandated by the statute which created the agency overall and, as I understand it, you have a dual role. You're both to look out for diversity within your own agency, but also diversity in the financial sector overall.
MARTIN: But you don't have any regulatory authority over their hiring practices.
ISHIMARU: No. But, you know, I think, starting off, you really need to know what the parameters are and that's something that we need to figure out first; of how people are doing, where the opportunities are, whether people are getting opportunities, both men and women, people of color, as well. And a lot of that is sort of a missing element and I'm hopeful that we can soon figure out what those parameters are and then try to figure out how do you get more people involved? How do you promote opportunities within the industry itself?
MARTIN: Why does diversity, particularly within this sector, matter?
ISHIMARU: Well, there's a couple of reasons, I think. One, is that the financial sector and the financial workings for all of us really does matter and we saw during the financial crisis of 2008 the higher impact that it had on people of color and women and how, quite often, they have not been represented in these various sectors.
And, as I learned at the EEOC, the more people you get who are diverse in whatever business you're in, usually it makes for a better work product because there's different perspectives being brought to the table. And I think that as a starting point makes sense.
You know, one thing that I've learned is that businesses quite often want to have those differing perspectives at the table.
MARTIN: It is also true that this financial crisis has many fathers, let's say - or mothers, if we want to be equal opportunity about it - and so it's still an open question whether at the root of it was regulation, at the root of it was aggressive business practices, ethics or a lack of education among consumers.
But it is a fact that there is fraud. A number of people perpetuating some of these financial frauds were people who preyed upon members of their own ethnic group. How would diversity address that question?
ISHIMARU: I think one of the things is that you can get a broader spectrum of ideas, opinions, perspectives on how people think, how do you market to people, how do you protect people to actually move their financial interests forward? By having a broader group of people at the table.
One of the difficult things with any industry is that, quite often, it gets narrowed down to like-thinking people, and one of the beauties of diversity, in my view, is by bringing different people who have not been involved in the past to the table, you get different viewpoints. And I think that really helps a business model.
MARTIN: How do you know, though? What's the evidence of that?
ISHIMARU: If you look at how businesses are set up now in a globalized economy, you see people do things differently in different places and I think we have learned from people who have operations overseas that because things are done differently then in this country, that can be very helpful.
Part of this is quantitative on the numbers that are generated and part of it is you're trying to reach a bigger segment of society, and that really can make a difference.
MARTIN: If you're just joining us, you're listening to TELL ME MORE from NPR News. I'm speaking with Stuart Ishimaru. He is the newly named head of the brand new Office of Minority and Women Inclusion at the Consumer Financial Protection Bureau.
We've talked on this program a number of times about how African-Americans and Latinos were disproportionately affected by the housing crisis and some studies show that there has been a tremendous loss of wealth in these groups as a result of this crisis.
How does your office address a question like that when there's a disparate impact on a particular group, but it isn't really clear why?
ISHIMARU: Right. Well, you know, I think there are many parts of the bureau that actually deal with this issue. My office is but one piece of this. We're looking to try to get increased diversity in the various sectors, as well as within our own operation, both for employees and contractors.
You know, part of this is educating people on what their rights are, what the parameters are of the financial world. That, for many communities, is something that they haven't dealt with in the past. I think that the bureau will take strides to try to reach broader audiences than have been reached in the past, and I think that's a good thing.
MARTIN: As I mentioned earlier, you're a former head of the Equal Employment Opportunity Commission and you have a very deep background in this area. Do you mind if we ask how you were drawn to it or why you were drawn to this particular area?
ISHIMARU: Well, you know, I always wanted to do good-guy work. Right? And, during law school, I sort of stumbled into working on civil rights issues and opportunities popped up. I was in the right place at the right time and have been very lucky over the course of years, and being able to find jobs that would let me do civil rights type work and this was yet another opportunity that popped up at the right time, and I'm looking forward to it.
MARTIN: Is there anything in your background or in your life experiences that you think pointed you on the path that you're now on?
ISHIMARU: Well, you know, one thing was the whole experience of the Japanese-Americans during World War II, before I was born, but you know, my parents and their families were taken from California, put in camps. They were both put in camps in Utah and were kept there for the duration of the war.
And the whole issue of civil liberties and civil rights being taken away during the wartime always affected me and as, you know, I saw in my later years that that was a fundamental defining experience for me. And the chance to give back in my work is very important.
MARTIN: On that whole question of taking liberties away, as you know, the agency for which you work - the agency overall, not your office in particular - has been hugely controversial at its creation, even though it's created by statute. But there have been continuous fights over what the scope of its authority should be. Those who oppose it say that they feel it's another example of kind of an overreaching federal government presence in the economic life of our country. Do you have a strategy for alleviating the skeptics?
ISHIMARU: Well, what I'm hopeful is - is that what we do over the course of my tenure there will be thoughtful and that we'll listen to a lot of people. We'll crunch a lot of numbers and issues and come out, hopefully, with a solution that works at the end of the day.
MARTIN: How will you know that you have succeeded in this job?
ISHIMARU: Well, part of it will be metrics. Part of it will be looking at the progress you've made, things you can measure. You can see what sorts of changes companies have made in their processes. You can see whether people have actually been hired or not, whether they've set goals that make sense. It's not all in the numbers.
Part of it is in atmosphere, as well, within the organization to see whether various organizations have become more open, more welcoming to various people who haven't been there in the past. And that's a real challenge.
MARTIN: Stuart Ishimaru is the new head of the Consumer Financial Protection Bureau's Office of Minority and Women Inclusion and he was kind enough to join us in our offices in Washington, D.C.
Stuart Ishimaru, thank you so much for speaking with us. I hope we'll speak again.
ISHIMARU: Thanks, Michel. Transcript provided by NPR, Copyright National Public Radio.