06/16/2011 02:39 pm ET Updated Aug 16, 2011

What if Banks Looked Like America?

Banks are in the news a lot lately. The foreclosure crisis rumbles on, dragging the housing market down and threatening a double-dip recession for the whole economy. Debates in Congress about the financial reform law passed last year are heating up again. What banks do and how they are run affect us all.

That's why The Greenlining Institute's latest report on bank boards of directors and management is worrisome. We focused our attention on nine major institutions with a large presence in California -- household names like Citi, Bank of America and Goldman Sachs. Citi's board was most diverse, while eight of nine boards were at least 80 percent white and 80 percent male. Five banks had zero Latino representation, four had no Asian Americans, and two had no African Americans.

Upper management as well is disproportionately white and male.

Bear in mind that this is in a state where 60 percent of the population is now people of color, and a nation where people of color will be the majority well within most of our lifetimes. These large financial institutions affect every aspect of our economic life -- who can buy a home, who can afford to start or expand a small business, etc., etc. If the decision-makers in these institutions bear no resemblance to the communities they serve, that's a problem.

While many of us regard diversity as a positive value in and of itself, there's a business case to be made as well: We're talking about a large and growing market. Projections for 2014 point to over $3 trillion in buying power for the combined African American, Asian American and Latino communities. And it's been known for some time that people of color are less likely to have bank accounts than whites.

So there is enormous growth potential for banks that skillfully approach communities of color, but to do so requires having decision makers who understand those communities -- their needs, circumstances, and especially the fears and concerns that have kept some of them from engaging with the banking system.

There's another point worth mentioning: We know that during the housing bubble, predatory lending disproportionately occurred in communities of color. For example, blacks and Latinos with high credit scores were far more likely than whites with comparable scores to receive high-cost, subprime loans. Diverse leadership at the top of these institutions can help build awareness of potentially discriminatory patterns, even when they're unintended or unconscious, and help avoid them.

Of course, this goes deeper than skin color. When we talk about diversity, we need to think not only of race and gender, important as those are, but also of diversity of background and experience. Someone who remembers the experience of growing up in a low income or marginalized community is more likely to understand those communities and do right by them. And ultimately that's good for the whole economy.

It's time for banks to look more like America.