The House of Representatives has passed H.R. 2543, The Financial Services Racial Equity, Inclusion, and Economic Justice Act. The bill tasks the Federal Reserve with assessing and finding ways to address socio-economic disparities between racial and ethnic groups.
The Congressional Budget Office assessment projects a $1 million-dollar annual cost for the Fed to meet these new goals.
“The legislation would support efforts of financial institutions like community development financial institutions and minority depository institutions that are working to serve historically underserved communities and promote greater diversity in corporate and bank governance,” the White House stated in a release. “The administration strongly supports efforts to promote equity for underserved communities and increase access to safe and affordable financial services, wealth, and economic opportunity for all Americans.”
Congresswoman Maxine Waters (D-Calif.) one of the bills co-sponsors and chair of the House Committee on Financial Services, called the legislation historic.
“This indeed was history in the making, this legislation will change the lives of millions,” Waters said. “Too often we have seen families denied mortgages, loans, and rules by government agencies that were established to ensure fairness and equity in financial services. The lack of fairness in lending have prevented communities of color from homeownership, small business development, fair pricing, and protection by the government. As banks close in small towns and cities across this country, low-income communities and communities of color are cut off from access to capital.”
Rep. Patrick McHenry (R-N.C.), ranking member of the House Committee on Financial Services, was critical of the bill and Democrats, stating that it did nothing to address the decades-high inflation and rapid increases in consumer costs.
McHenry claimed that Democrats are only trying to “distract struggling families with H.R. 2543—a bill that might sound good but does nothing to bring down consumer prices or help struggling families. Let me be clear, Republicans support improving diversity in financial services, but H.R. 2543 misses the mark.”
McHenry continued in his critique by asserting that the bill “blatantly politicizes the Fed” by issuing a third mandate to close socio-economic disparity all during a time where President Joe Biden is calling to “respect the Fed’s independence.”
It is unclear if H.R. 2543’s Senate counterpart will achieve passage as it continues to sit in the Banking, Housing and Urban Affairs Committee without a scheduled hearing.