Professor Chris Brummer Calls for More Black Financial Regulators in SEC Black History Month Keynote

February 22, 2021

Chris Brummer speaking at Georgetown Law's 40th Annual International Trade Update on March 7, 2019.

For Georgetown Law Professor Chris Brummer, the nation’s glaring lack of Black financial regulators is tied directly to the long history of economic injustice. In his keynote address at the Security and Exchange Commission’s Black History Month Celebration, Brummer challenged the agency to increase its Black representation.

“Financial regulators write the rules of capitalism,” Brummer told a February 17 virtual gathering open to hundreds of SEC employees across the country. “Yet despite its importance, or perhaps because of it, Black Americans, for all their great history, have been singularly excluded from fully participating in the regulatory process.”

Brummer revealed the startling lack of diversity among political appointees to federal financial regulatory agencies in his 2020 working paper, What do the Data Reveal about (the Absence of Black) Financial Regulators? There has never been a Black chairman of the SEC, Federal Reserve, FDIC or the Commodities Futures Trading Commission (CFTC), he found. In the paper, which was published by Brookings, he found that only 3% of political appointees to financial regulatory posts have been Black.

In his speech, he added that of the 129 heads of major regulatory agencies since the founding of the Federal Reserve in 1913, only two have been black, representing a mere 1.55% of agency heads. Brummer also introduced startling new data that absence at the top of agencies is reflected in senior posts. He showed that since the founding of the Securities and Exchange Commission in 1934, only two of the directors of the agency’s divisions had been black. At the CFTC, there has never been a Black director of a division.

Brummer’s groundbreaking research was covered in The Wall Street Journal among other media outlets, and his speech by the New York Times and Bloomberg. His work will also be featured in the CFTC’s Black History Month program.

“Professor Brummer’s important research reminds us that everyone benefits from having a wide variety of views to guide our financial policies,” said Emma Coleman Jordan, the J. Crilley Kelly and Terry Curtin Kelly Professor of Business Law and Economic Justice — a field she helped pioneer. “If we think about the 2008 financial crisis, we can see the potential impact of a racially diverse leadership in foreseeing the systemic impact of predatory home mortgages. Racially diverse experiences in American financial regulatory leadership are indeed indispensable to global security and stability.”

The lack of Black representation among financial decision makers has a long history. In his speech to the SEC, Brummer in particular cited the Freedman’s Savings Bank. Founded after the Civil War specifically to serve the financial needs of newly emancipated Black people, the bank had an all-white board of trustees. The bank failed in 1874 when risky investments in railroads and real estate went bad, wiping out the first generation of Black wealth in the South.

“Since that failure, Black people have sought to bend the arc of history and gain a footing into a system where they have long been ignored,” Brummer said.

Brummer also spoke about the higher bar for consideration Black nominees face compared to white ones and called the lack of Black nominees a bipartisan failure.

“Any time new faces enter a conversation they will face resistance from entrenched interests who are happy with the status quo,” he said. “The pipeline myth of Black talent is as disingenuous as it is insidious.”

To the contrary, Brummer said his data reveals that Black political appointees to regulatory agencies have been better educated than their non-black peers. Brummer also feels that Black nominees are held to a double standard where their corporate ties are held against them more harshly than white nominees.

Black Americans “often find themselves the first in their families to secure education, and do not have the luxury of family inheritance or connections to build their financial lives,” he said. “Wall Street is more diverse than the leadership of our regulatory agencies.”

Brummer is the Agnes N. Williams Research Professor at Georgetown Law as well as faculty director of the Institute of International Economic Law (IIEL). He teaches courses on securities regulation, as well as international finance and regulation, and is a leading cryptocurrency expert. In 2017, Brummer founded DC Fintech Week, a highly attended annual conference that brings financial innovators and regulators together.

Brummer also has firsthand experience with the political nomination process; in 2016 he was nominated by President Obama to serve as a Commissioner on the CFTC. He was unanimously approved by the Senate Agriculture Committee, but before he was confirmed by the full Senate, President Trump withdrew all outstanding nominations including Brummer’s.

Now, with a new administration in place, Brummer told his SEC audience that the current moment provides an opportunity to write a new chapter of economic justice into Black history — and American history writ large.

“Regulators of every background – Black, white, Latino, Asian – come to work to make a difference,” he said. “But it is time to ensure that in our mission to create ladders of opportunity we do not embed infrastructure of inequality.”