Consumers are empowered with more information than ever before, and they’re using their knowledge of the companies they do business with to make important decisions like who they work for, and what products they purchase.
Information like labor practices, product sourcing, and even diversity and inclusion are now important factors for the consumer’s decision-making process. or many people, that means ensuring that the banks and credit unions they use are serious about the cause of diversity, equity, and inclusion. Who you bank with can say a lot about you, and importantly, the decisions a financial institution can make affects the communities in which they live.
According to studies on the nation’s biggest banks, major financial institutions have a great deal of work to do when it comes to ensuring the racial, ethnic, and gender diversity of their leadership, including executives and members of the board of directors. In fact, a U.S. House committee in 2020 found that almost half of the workforce of the 44 biggest banks in the country were members of underrepresented groups, only 19% of executive or senior-level positions went to racial or ethnic minorities.¹
We wanted to understand more about the diversity efforts of financial institutions big and small, so we analyzed our database of banks and credit unions in every state, determining the number of executives and board members who are women or members of underrepresented racial or ethnic groups. RateBunni uses a proprietary diversity score and assigns one to each lender (this score is explained below).
- Lenders in Montana have both the highest average diversity scores (8.4 out of 10) and the highest percentage of lenders that meet our diversity benchmark (at least 6/10).
- The average diversity score in six states (Michigan, Idaho, Utah, Kansas, Rhode Island, and New Hampshire) falls below our diversity benchmark. Michigan’s average diversity score is the lowest, 5.5/10.
- Idaho has the lowest share of lenders that meet the diversity benchmark; only 46% meet this minimum score.
Diversity Scores Explained
In our analysis, we rated each lender on a scale of 1-10 for how well the institution is living up to the promise of diversity, equity, and inclusion. To determine this diversity score, we used 4 different factors: women in leadership positions, women on their Board of Directors, people of color in leadership positions, and people of color in their Board of Directors. Banks and credit unions for whom this information could not be found were excluded from this analysis.
Average Lender Diversity Scores by State
For consumers who want to use diversity ratings as part of their research when it comes to borrowing money, there’s a good chance more lenders will begin publicly disclosing this information.
For one, consumers in recent years have taken a more direct stand on wanting corporations to act in the best interest of society. That could mean wanting their employers to address racial equity issues (80% of workers say their employer should do this²), or it could mean ensuring they only support businesses that align with their values.³
Our data shows that in every state, the average diversity score for lenders is at least 5, though there are several states where the average lender’s diversity score falls below our benchmark of 6.
Montana has the highest average lender diversity score, 8.4, followed by D.C., South Dakota, Florida, and Nebraska. Michigan has the lowest average lender diversity score, just 5.5.
Benchmark Diversity Score
About 57% of national lenders included in our analysis meet the 6/10 benchmark score, but consumers in some states are much more likely to find lenders near them that meet this mark. Montana, which also has the highest average diversity score, also boasts a 100% rate when it comes to the share of lenders that meet our benchmark.
Idaho is last in this rate (46%), followed by Michigan, Utah, and Kansas, which all have a 50% benchmark rate. A total of 36 states exceed the national rate of 57% in this measure.
America's Most Diverse Lenders
Ultimately, people care about more than just rates when choosing a new bank. Who you do business with says a lot about who you are and what you care about, just as people buy fair-trade products and shop local. The same is true for who we bank with, and choosing the banks and credit unions with similar values as people do.
RateBunni helps consumers pick the best bank for their needs by providing tools, data, and an experience that is complete, unbiased, and empathetic to their needs. RateBunni also includes diversity information on each lender; simply look for the diversity level indicator:
No personal info required.
Our analysis is based on publicly available data we’ve collected on hundreds of lenders across the country. This analysis included only those banks and credit unions in the continental United States for which racial, ethnic, or gender information on the institutions’ leadership was publicly available. It covers 441 financial institutions, including banks and credit unions who provide consumer lending products including personal loans, used auto loans, and/or home mortgages. Data in this analysis is from December 2021.