by Antoine Thompson
There is a whopping double digit gap in homeownership rates between Black and White Americans. One key indicator of this problem is the lack of diversity within the financial industry. Whether it is hiring bank managers or lending executives, African-Americans continue to be under-represented in the mortgage and financial industry.
This lack of diversity can have an impact on decisions on where to open and/or close banks, where to market lending programs for homeownership and small business owners, which organizations to partner with, and much more. Every day, decisions are made at these institutions related to lending, hiring, and services. Increasing the number of African-American employees within these organizations is essential. Increasing Workforce Diversity in the Financial Industry Workforce and supplier diversity programs can play a key role in helping government and private sector lending institutions in their efforts to increase homeownership rates locally and nationally.
Many institutions are hiring Chief Diversity Officers and developing workforce, minority and women business utilization strategies because of the changing demographics and economic trends in America. Also, a diverse workforce helps employees and consumers to believe that lenders value them. It is well documented that the retention of Black employees is increased when diversity is reflected at all levels in the organization from entry level to senior executive positions. Equally important, the creation of workforce diversity goals must also be connected to the mission of the organization, business model, management annual performance reviews, and other key business metrics.
There is a saying that “What gets measured, gets done.” Supplier Diversity Can Impact Homeownership Rates The vendors, consultants, contractors and businesses utilized by public and private sector lending institutions tell a narrative and paint a picture of their value system and identity. Where advertisements are placed to promote homeownership and lending programs; the companies chosen for outside human resource functions; the businesses selected for leasing, REO and relocation functions; and where corporate retreats and meetings are held, shape the psyche of consumers, staff and public. Simply put, supplier diversity programs will increase lending and financial institutions market presence in the Black community, meanwhile enabling black business owners to hire more workers that will have a greater chance of becoming a homeowner.
In short, workforce and diversity programs embraced by lending institutions can have positive impacts on African- Americans access to capital, lending policies, as well as how community reinvestment and mortgage marketing funds will be spent. It was only yesterday, that Black people were protesting to become bank tellers. Now we must renew our commitment to ensure that we are building not only diverse bank branches but corporate offices that shape how lending policies and decisions are made.
Mr. Thompson is a licensed Real Estate Agent, Consultant, and Former NYS State Senator. He is also the National Executive Director of the National Association of Real Estate Brokers.