This is the accessible text file for GAO report number GAO-06-843T 
entitled 'Financial Services Industry: Overall Trends in Management-
Level Diversity Initiatives, 1993-2004' which was released on July 12, 
2006. 

This text file was formatted by the U.S. Government Accountability 
Office (GAO) to be accessible to users with visual impairments, as part 
of a longer term project to improve GAO products' accessibility. Every 
attempt has been made to maintain the structural and data integrity of 
the original printed product. Accessibility features, such as text 
descriptions of tables, consecutively numbered footnotes placed at the 
end of the file, and the text of agency comment letters, are provided 
but may not exactly duplicate the presentation or format of the printed 
version. The portable document format (PDF) file is an exact electronic 
replica of the printed version. We welcome your feedback. Please E-mail 
your comments regarding the contents or accessibility features of this 
document to Webmaster@gao.gov. 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately. 

Testimony: 

Before the Subcommittee on Oversight and Investigations, Committee on 
Financial Services, House of Representatives: 

United States Government Accountability Office: 

GAO: 

For Release on Delivery Expected at 2:00 p.m. EDT: 

Wednesday, July 12, 2006: 

Financial Services Industry: 

Overall Trends in Management-Level Diversity and Diversity Initiatives, 
1993-2004: 

Statement of Orice M. Williams, Director Financial Markets and 
Community Investment: 

GAO-06-843T: 

GAO Highlights: 

Highlights of GAO-06-843T, a testimony before the Subcommittee on 
Oversight and investigations, Committee on Financial Services, House of 
Representatives. 

Why GAO Did This Study: 

A July 2004 congressional hearing raised concerns about the lack of 
diversity in the financial services industry, particularly in key 
management positions. Some witnesses noted that these firms (e.g., 
banks and securities firms) had not made sufficient progress in 
recruiting minorities and women at the management level. Others raised 
concerns about the ability of minority-owned businesses to raise debt 
and equity capital. 

At the request of the House Financial Services Committee, GAO was asked 
to provide a report on overall trends in management-level diversity and 
diversity initiatives from 1993 through 2004. This testimony discusses 
that report and focuses on (1) what the available data show about 
diversity at the management level, (2) the types of initiatives that 
the financial services industry has taken to promote workforce 
diversity and the challenges involved, and (3) the ability of minority- 
and women-owned businesses to obtain capital and initiatives financial 
institutions have taken to make capital available to these businesses. 

For our analysis, we analyzed data from the Equal Employment 
Opportunity Commission (EEOC); reviewed select studies; and interviewed 
officials from financial services firms, trade organizations, and 
federal agencies. 

GAO makes no recommendations at this time. 

What GAO Found: 

From 1993 through 2004, overall diversity at the management level in 
the financial services industry did not change substantially, but some 
racial/ethnic minority groups experienced more change in representation 
than others. EEOC data show that management-level representation by 
minority women and men overall increased from 11.1 percent to 15.5 
percent (see fig. below). Specifically, African-Americans increased 
their representation from 5.6 percent to 6.6 percent, Asians from 2.5 
percent to 4.5 percent, Hispanics from 2.8 percent to 4.0 percent, and 
American Indians from 0.2 percent to 0.3 percent. 

Financial services firms and trade groups have initiated programs to 
increase workforce diversity, but these initiatives face challenges. 
The programs include developing scholarships and internships, 
partnering with groups that represent minority professionals, and 
linking managers’ compensation with their performance in promoting a 
diverse workforce. Some firms have developed indicators to measure 
progress in achieving workforce diversity. Industry officials said that 
among the challenges these initiatives face are recruiting and 
retaining minority candidates, as well as gaining the “buy-in” of key 
employees, such as the middle managers who are often responsible for 
implementing such programs. 

Research reports suggest that minority- and women-owned businesses have 
difficulty obtaining access to capital for several reasons, such as 
that these businesses may be concentrated in service industries and 
lack assets to pledge as collateral. Some studies suggest that lenders 
may discriminate, but proving such an allegation is complicated by the 
lack of available data. However, some financial institutions, primarily 
commercial banks, said that they have developed strategies to serve 
minority- and women-owned businesses. These strategies include 
marketing existing financial products specifically to minority and 
women business owners. 

Figure: Workforce Representation in the Financial Services Industry at 
the Management Level by Racial/Ethnic Group and Gender (1993, 1998, 
2000, and 2004): 

[See PDF for Image] 

Source: GAO analysis of EEOC data. 

[End of Figure] 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-843T]. 

To view the full product, including the scope and methodology, click 
the link above. For more information, contact Orice M. Williams at 
(202) 512-5837 or williamso@gao.gov. 

[End of Section] 

Madam Chairwoman and Members of the Subcommittee: 

I am pleased to be here today to discuss our work on two important 
issues: workforce diversity in the financial services industry and 
access to capital for minority-and women-owned businesses. Two years 
ago, this subcommittee held a hearing that raised concerns about the 
lack of diversity in the financial services industry, particularly in 
key management positions.[Footnote 1] As you may recall, some witnesses 
noted that these firms--banks and securities firms, for example--had 
not made sufficient progress in recruiting minorities and women at the 
management level. Others expressed concerns about the ability of 
minority-owned businesses to raise debt and equity capital. 

My remarks are based on our report that is being released today, which 
we prepared at the request of the Chairman and Ranking Minority Member 
of the full committee, the Chairman and Ranking Minority Member of the 
Subcommittee on Oversight and Investigations, and Representative David 
Scott.[Footnote 2] Specifically, I will discuss (1) what the available 
data show about diversity at the management level in the financial 
services industry from 1993 through 2004, (2) the types of initiatives 
that the financial services industry and related organizations have 
taken to promote workforce diversity and the challenges involved, and 
(3) the ability of minority-and women-owned businesses to obtain 
capital and initiatives financial institutions have taken to make 
capital available to these businesses.[Footnote 3] 

For our analysis, we used the Equal Employment Opportunity Commission's 
(EEOC) Employer Information Report (EEO-1) data on financial services 
firms with 100 or more employees.[Footnote 4] We also reviewed publicly 
available information, including reports, and interviewed officials 
from a variety of financial services firms, including commercial banks, 
securities firms, and private equity/venture capital organizations, as 
well as representatives from industry trade organizations and federal 
agencies. 

In summary: 

From 1993 through 2004, overall workforce diversity at the management 
level in the financial services industry did not change substantially, 
but some racial/ethnic minority groups experienced more change in 
representation than others.[Footnote 5] EEO-1 data show that management-
level representation by minority women and men overall increased from 
11.1 percent to 15.5 percent. Specifically, African- Americans 
increased their representation from 5.6 percent to 6.6 percent, Asians 
from 2.5 percent to 4.5 percent, Hispanics from 2.8 percent to 4.0 
percent, and American Indians from 0.2 percent to 0.3 percent. 
Representation by white women remained constant at slightly more than 
one-third during this period, while representation by white men 
declined from 52.2 percent to 47.2 percent. Depository institutions, 
such as commercial banks, and insurance companies generally were more 
diverse at the management level than securities firms. In addition, 
according to the 2004 EEO-1 data, minorities held 13.5 percent and 
white women held 32.4 percent of all "officials and managers" positions 
in the accounting industry. 

Although financial services firms and trade groups have initiated 
programs to increase workforce diversity, these initiatives face 
challenges that may help explain why overall diversity at the 
management level has not changed substantially. Officials at financial 
services firms said that diversity was an important goal and that top 
leadership was committed to recruiting and retaining minority and women 
candidates. Some financial services firms have established scholarship 
and internship programs or partnered with groups that represent 
minority professionals. Officials from a few firms told us that they 
had begun linking managers' compensation to their performance in 
promoting workforce diversity, and some firms had developed indicators 
(e.g. representation by minorities and women in key positions) to 
measure progress in achieving workforce diversity. Industry officials 
said that among the challenges these initiatives face are recruiting 
and retaining minority candidates, as well as gaining the "buy-in" of 
key employees, such as the middle managers who are often responsible 
for implementing such programs. 

Research reports and discussions with financial services firms and 
relevant trade groups suggest that minority-and women-owned businesses 
generally have difficulty obtaining access to capital in conventional 
financial markets. A 2004 report by the U.S. Department of Commerce's 
Minority Business Development Agency (MBDA) stated that minority-owned 
businesses may have difficulty obtaining capital because they are often 
concentrated in service industries and lack sufficient assets to pledge 
as collateral.[Footnote 6] Some studies suggest that lenders may 
discriminate in deciding whether to make loans to minority businesses, 
but proving such an allegation is complicated by the lack of available 
data. In particular, the Federal Reserve's Regulation B prohibits 
financial institutions from requiring information on race and gender 
from applicants for nonmortage credit products.[Footnote 7] Some 
federal financial regulators have stated that removing the prohibition 
would allow them to better monitor and enforce laws prohibiting 
discrimination in lending. Some financial institutions, primarily 
commercial banks, said that they have developed strategies to serve 
minority-and women-owned businesses. These strategies include marketing 
existing financial products specifically to minority and women business 
owners. 

Background: 

We defined the financial services industry to include the following 
sectors: 

* depository credit institutions, which include commercial banks, 
thrifts (savings and loan associations and savings banks), and credit 
unions; 

* holdings and trusts, which include investment trusts, investment 
companies, and holding companies; 

* nondepository credit institutions, which extend credit in the form of 
loans, include federally sponsored credit agencies, personal credit 
institutions, and mortgage bankers and brokers; 

* the securities sector, which is made up of a variety of firms and 
organizations (e.g., broker-dealers) that bring together buyers and 
sellers of securities and commodities, manage investments, and offer 
financial advice; and: 

* the insurance sector, including carriers and insurance agents, which 
provides protection against financial risks to policyholders in 
exchange for the payment of premiums. 

Additionally, the financial services industry is a major source of 
employment in the United States. According to the EEO-1 data, the 
financial services firms we reviewed for this testimony, which have 100 
or more staff, employed nearly 3 million people in 2004. Moreover, 
according to the U.S. Bureau of Labor Statistics, employment in 
management and professional positions in the financial services 
industry was expected to grow at a rate of 1.2 percent annually through 
2012. Finally, a recent U.S. Census Bureau report based on data from 
the 2002 Economic Census stated that, between 1997 and 2002, Hispanics 
in the United States opened new businesses at a rate three times faster 
than the national average.[Footnote 8] 

Diversity in the Financial Services Industry at the Management Level 
Did Not Change Substantially between 1993 and 2004: 

Overall EEO-1 data do not show substantial changes in diversity at the 
management level and suggest that certain financial sectors are more 
diverse at this level than others. Figure 1 shows that overall 
management-level representation by minorities increased from 11.1 
percent to 15.5 percent from 1993 through 2004. Specifically, African- 
Americans increased their representation from 5.6 percent to 6.6 
percent, Asians from 2.5 percent to 4.5 percent, Hispanics from 2.8 
percent to 4.0 percent and American Indians from 0.2 to 0.3 percent. 
Management-level representation by white women was largely unchanged at 
slightly more than one-third during the period, while representation by 
white men declined from 52.2 percent to 47.2 percent. 

EEO-1 data may actually overstate representation levels for minorities 
and white women in the most senior-level positions, such as Chief 
Executive Officers of large investment firms or commercial banks, 
because the category that captures these positions--"officials and 
managers"--covers all management positions. Thus, this category 
includes lower level positions (e.g., assistant manager of a small bank 
branch) that may have a higher representation of minorities and women. 
In 2007, EEOC plans to use a revised form for employers that divides 
this category into "executive/senior-level officers and managers" and 
"first/mid-level officials," which could provide a more accurate 
picture of diversity among senior managers. 

Figure 1: EEO-1 Data on Trends in Workforce Diversity in the Financial 
Services Industry at the Management Level by Racial/Ethnic Group and 
Gender (1993, 1998, 2000, and 2004): 

[See PDF for image] 

Source: GAO analysis of EEOC data. 

Note: Percentages may not always add to 100 due to rounding. 

[End of figure] 

As shown in figure 2, EEO-1 data also show that the depository and 
nondepository credit sectors, as well as the insurance sector, were 
somewhat more diverse at the management level than the securities and 
holdings and trust sectors. In 2004, minorities held 19.9 percent of 
management-level positions in nondepository credit institutions, such 
as mortgage bankers and brokers, but 12.4 percent in holdings and 
trusts, such as investment companies. 

Figure 2: EEO-1 Data on Workforce Diversity in the Financial Services 
Industry at the Management Level by Sector (2004): 

[See PDF for Image] 

Source: GAO analysis of EEOC data. 

Note: Percentages may not always add to 100 due to rounding. 

[End of Figure] 

You also asked that we collect data on the accounting industry. 
According to the 2004 EEO-1 data, minorities held 13.5 percent, and 
white women held 32.4 percent of all "officials and managers" positions 
in the accounting industry. 

Initiatives to Promote Workforce Diversity in the Financial Services 
Industry Face Challenges: 

Minorities' rapid growth as a percentage of the overall U.S. population 
and increased global competition have convinced some financial services 
firms that workforce diversity is a critical business strategy. 
Officials from the firms with whom we spoke said that their top 
leadership was committed to implementing workforce diversity 
initiatives, but noted that they faced challenges in making such 
initiatives work. In particular, they cited ongoing difficulties in 
recruiting and retaining minority candidates and in gaining employees' 
"buy-in" for diversity initiatives, especially at the middle management 
level. 

Financial Services Firms Have Implemented a Variety of Diversity 
Initiatives: 

Since the mid-1990s, some financial services firms have implemented a 
variety of initiatives designed to recruit and retain minority and 
women candidates to fill key positions. Officials from several banks 
said that they had developed scholarship and internship programs to 
encourage minority students to consider careers in banking. Some firms 
and trade organizations have also developed partnerships with groups 
that represent minority professionals and with local communities to 
recruit candidates through events such as conferences and career fairs. 
To help retain minorities and women, firms have established employee 
networks, mentoring programs, diversity training, and leadership and 
career development programs. 

Officials from some financial services firms we contacted, as well as 
industry studies, noted that that financial services firms' senior 
managers were involved in diversity initiatives. For example, according 
to an official from an investment bank, the head of the firm meets with 
every minority and female senior executive to discuss his or her career 
development. Officials from a few commercial banks said that the banks 
had established diversity "councils" of senior leaders to set the 
vision, strategy, and direction of diversity initiatives. A 2005 
industry trade group study and some officials also noted that some 
companies were linking managers' compensation with their progress in 
hiring, promoting, and retaining minority and women employees.[Footnote 
9] 

A few firms have also developed performance indicators to measure 
progress in achieving diversity goals. These indicators include 
workforce representation, turnover, promotion of minority and women 
employees, and employee satisfaction survey responses. Officials from 
several financial services firms stated that measuring the results of 
diversity efforts over time was critical to the credibility of the 
initiatives and to justifying the investment in the resources such 
initiatives demanded. 

Several Challenges May Have Affected the Success of Workforce Diversity 
Initiatives in the Financial Services Industry: 

The financial services firms and trade organizations we contacted that 
had launched diversity initiatives cited a variety of challenges that 
may have limited the success of their efforts. First, officials said 
that the industry faced ongoing challenges in recruiting minority and 
women candidates. According to industry officials, the industry lacks a 
critical mass of minority employees, especially at the senior levels, 
to serve as role models to attract and retain other minorities. 
Available data on minority students enrolled in Master of Business 
Administration (MBA) programs suggest that the pool of minorities, a 
source that may feed the "pipeline" for management-level positions 
within the financial services industry and other industries, is 
relatively small.[Footnote 10] In 2000, minorities accounted for 19 
percent of all students enrolled in MBA programs in accredited U.S. 
schools; in 2004, that student population had risen to 23 percent. 
Financial services firms compete for this relatively small pool not 
only with one another but also with firms from other industries. 

Evidence suggests, however, that the financial services industry may 
not be fully leveraging its "internal" pipeline of minority and women 
employees for management-level positions. As shown in figure 3, there 
are job categories within the financial services industry that 
generally have more overall workforce diversity than the "official and 
managers" category, particularly among minorities. For example, 
minorities held 22 percent of "professional" positions in the industry 
in 2004 as compared with 15 percent of "officials and managers" 
positions. According to a recent EEOC report, the professional category 
represented a possible pipeline of available management-level 
candidates.[Footnote 11] The EEOC states that the chances of minorities 
and women (white and minority combined) advancing from the professional 
category into management-level positions is lower when compared with 
white males. 

Figure 3: EEO-1 Data (Percentage) on Workforce Diversity in the 
Financial Services Industry by Position, Gender, and Racial/Ethnic 
Group (2004): 

{See PDF for Image] 

Source: GAO analysis of EEOC data. 

Note: Percentages may not always add to 100 due to rounding. 

[End of Figure] 

Many officials from financial services firms and industry trade groups 
agreed that retaining minority and women employees represented one of 
the biggest challenges to promoting workforce diversity. One reason 
they cited is that the industry, as described previously, lacks a 
critical mass of minority men and women, particularly in senior-level 
positions, to serve as role models. Without a critical mass, the 
officials said that minority or women employees may lack the personal 
connections and access to informal networks that are often necessary to 
navigate an organization's culture and advance their careers. For 
example, an official from a commercial bank we contacted said he 
learned from staff interviews that African-Americans believed that they 
were not considered for promotion as often as others partly because 
they were excluded from informal employee networks needed for promotion 
or to promote advancement. 

In addition, some industry officials said that achieving "buy-in" from 
key employees such as middle managers could be challenging. Middle 
managers are particularly important to diversify institutions because 
they are often responsible for implementing key aspects of diversity 
initiatives and for explaining them to other employees. However, the 
officials said that middle managers may be focused on other aspects of 
their responsibilities, such as meeting financial performance targets, 
rather than the importance of implementing the organization's diversity 
initiatives. Additionally, the officials said that implementing 
diversity initiatives represents a considerable cultural and 
organizational change for many middle managers and employees at all 
levels. An official from an investment bank told us that the bank has 
been reaching out to middle managers who oversee minority and women 
employees by, for example, instituting an "inclusive manager program." 

Minority-and Women-Owned Businesses Often Face Difficulties in 
Obtaining Capital: 

Studies and reports, as well as interviews we conducted, suggest that 
minority-and women-owned businesses face challenges obtaining bank 
credit in conventional financial markets for several reasons, including 
business characteristics (e.g., small firm size) and the possibility 
that lenders may discriminate. Some business characteristics may also 
limit the ability of minority-and women-owned businesses to raise 
equity capital.[Footnote 12] However, some financial institutions, 
primarily commercial banks, have recently begun marketing their loan 
products and offering technical assistance to minority-and women-owned 
businesses. 

Business Characteristics May Affect Minority-and Women-Owned 
Businesses' Access to Commercial Loans and Equity Capital: 

Reports and other research, as well as interviews we conducted with 
commercial banks, including minority-owned banks and trade groups 
representing minority-and women-owned businesses, highlight some of the 
challenges these businesses may face in obtaining commercial bank 
credit. For example, many minority-owned businesses are in the retail 
and service sectors and may have few assets to offer as 
collateral.[Footnote 13] Further, many of these businesses are 
relatively young and may not have an established credit 
history.[Footnote 14] Many also are relatively small and often lack 
technical expertise.[Footnote 15] 

On the other hand, some studies suggest that lenders may discriminate 
against minority-owned businesses. We reviewed one study that found 
given comparable loan applications--by African-American and Hispanic- 
owned firms and white-owned firms--the applications by the African- 
American and Hispanic-owned firms were more likely to be 
denied.[Footnote 16] However, assessing such alleged discrimination may 
be complicated by limitations in data availability. The Federal 
Reserve's Regulation B, which implements the Equal Credit Opportunity 
Act, prohibits financial institutions from requiring information on 
race and gender from applicants for nonmortgage credit 
products.[Footnote 17] Although the regulation was initially 
implemented to prevent such information from being used to discriminate 
against certain groups, some federal financial regulators have stated 
that removing the prohibition would allow them to better monitor and 
enforce laws prohibiting discrimination in lending. Likewise, at least 
one bank official noted that Regulation B limited the bank's ability to 
measure the success of its efforts to provide financial services to 
minority groups. We note that under the Home Mortgage Disclosure Act 
(HMDA), lenders are required to collect and report data on racial and 
gender characteristics of applicants for mortgage loans. Researchers 
have used the HMDA data to assess potential mortgage lending 
discrimination by financial institutions. 

Research also suggests that some business characteristics (e.g., 
limited technical expertise) that may affect the ability of many 
minority-and women-owned businesses to obtain bank credit, as discussed 
earlier, may also limit their capacity to raise equity 
capital.[Footnote 18] Although venture capital firms may not have 
traditionally invested in minority-owned businesses, a recent study 
suggests that firms that do focus on such entities can earn rates of 
return comparable to those earned on mainstream private equity 
investments.[Footnote 19] 

Some Commercial Banks Have Developed Programs for Minority-and Women- 
Owned Businesses: 

Officials from some financial institutions we contacted, primarily 
large commercial banks, told us that they are reaching out to minority- 
and women-owned businesses by marketing their financial products to 
them (including in different languages), establishing partnerships with 
relevant trade and community organizations, and providing technical 
assistance. For example, officials from some banks said that they 
educate potential business clients by providing technical assistance 
through financial workshops and seminars on various issues, such as 
developing a business plans and obtaining commercial bank loans. While 
these efforts take time and resources, the officials we spoke with 
indicated that their institutions recognize the benefits of tapping 
this growing segment of the market. 

Madam Chairwoman, this concludes my prepared statement. I would be 
pleased to respond to any questions you or other Members of the 
Subcommittee may have. 

Staff Contact and Acknowledgments: 

For further information about this testimony, please contact Orice M. 
Williams on (202) 512-8678 or at williamso@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this statement. Individuals making key 
contributions to this testimony include Wesley M. Phillips, Assistant 
Director; Emily Chalmers; William Chatlos; Kimberly Cutright; Simin Ho; 
Marc Molino; Robert Pollard; LaSonya Roberts; and Bethany Widick. 

FOOTNOTES 

[1] Diversity in the Financial Services Industry and Access to Capital 
for Minority Owned Businesses: Challenges and Opportunities, Hearing 
Before the Subcommittee On Oversight and Investigations of the House 
Committee on Financial Services, 108th Cong. (2004). 

[2] GAO, Financial Services Industry: Overall Trends in Management- 
Level Diversity and Diversity Initiatives, 1993-2004, GAO-06-617 
(Washington, D.C.: June 1, 2006). 

[3] A minority-owned business is defined by the U.S. Census Bureau as a 
business in which a minority owns 51 percent or more of the stock or 
equity in the business. A woman-owned business is defined by Census as 
a business in which a woman owns 51 percent or more of the stock or 
equity in the business. 

[4] We used the EEO-1 "officials and managers" job category as the 
basis for our discussion of management-level diversity within the 
financial services industry. EEOC defines the job category of 
"officials and managers" as occupations requiring administrative and 
managerial personnel, who set broad policies, exercise overall 
responsibility for execution of these policies, and direct individual 
departments or special phases of a firm's operation. 

[5] For the purposes of this testimony, we focused the diversity 
discussion on changes in management-level representation over time by 
racial/ethnic minority groups, including African-Americans, Asians, 
Hispanics, and American Indians. 

[6] U.S. Department of Commerce, MBDA, "Expanding Financing 
Opportunities for Minority Businesses" (2004). 

[7] The Federal Reserve's Regulation B implements the Equal Credit 
Opportunity Act (ECOA). ECOA, 15 U.S.C. §§ 1691-1691f, makes it 
unlawful for a creditor to discriminate against an applicant in any 
aspect of a credit transaction on the basis of the applicant's national 
origin, religion, sex, color, race, age (provided the applicant has the 
capacity to contract). Racial and gender information can be collected 
in two very limited circumstances, neither of which results in publicly 
available data regarding the race/ethnicity or gender of the bank's 
nonmortgage credit applicants. 

[8] U.S. Census Bureau, Survey of Business Owners: Hispanic-Owned 
Firms: 2002 (March 2006). 

[9] Securities Industry Association, 2005 Report on Diversity Strategy, 
Development and Demographics: Executive Summary (November 2005). 

[10] Association to Advance Collegiate Schools of Business. 

[11] See EEOC, Diversity in the Finance Industry (April 2006). 

[12] Equity capital can be raised from several sources including 
venture capital funds, private stock sales, or issuing stock in public 
financial markets. 

[13] U.S. Department of Commerce, Minority Business Development Agency, 
Expanding Financing Opportunities for Minority Businesses (2004). U.S. 
Department of Commerce, Minority Business Development Agency, Keys to 
Minority Entrepreneurial Success, Capital, Education, and Technology 
(September 2002). U.S. Department of Commerce, Minority Business 
Development Agency, State of Minority Business Enterprises: A 
Preliminary Overview of the 2002 Survey of Business Owners (September 
2005). 

[14] U.S. Census Bureau, "2002 Survey of Business Owners, Women-Owned 
Firms" (Jan. 26, 2006). 

[15] U.S. Department of Commerce, Minority Business Development Agency, 
Keys to Minority Entrepreneurial Success, Capital, Education, and 
Technology (September 2002). U.S. Small Business Administration, Office 
of Advocacy, Financing Patterns of Small Firms: Findings from the 1998 
Survey of Small Business Finance (September 2003). All small businesses 
may face challenges in obtaining credit due to the risks and costs 
involved in such lending. See Board of Governors of the Federal Reserve 
System, Report to the Congress on the Availability of Credit to Small 
Businesses (September 2002). 

[16] Blanchard, Lloyd, John Yinger, and Bo Zhao (2005), "Do Credit 
Market Barriers Exist for Minority and Women Entrepreneurs?" Syracuse 
University, Center for Policy Research Working Paper No. 74. 

[17] The Equal Credit Opportunity Act (ECOA), 15 U.S.C. §§ 1691-1691f. 

[18] Center for Women's Business Research, Access to Capital: Where 
We've Been, Where We're Going (March 2005). Brush, C. G; Carter, N; 
Gatewood, E; Greene P. G; and Hart, M. M. Gatekeepers of Venture 
Growth: A Diana Project Report on the Role and Participation of Women 
in the Venture Capital Industry (Oct. 20, 2001). 

[19] Bates, Timothy and William Bradford (2003). "Minorities and 
Venture Capital, A New Wave in American Business." Kauffman Foundation. 

GAO's Mission: 

The Government Accountability Office, the investigative arm of 
Congress, exists to support Congress in meeting its constitutional 
responsibilities and to help improve the performance and accountability 
of the federal government for the American people. GAO examines the use 
of public funds; evaluates federal programs and policies; and provides 
analyses, recommendations, and other assistance to help Congress make 
informed oversight, policy, and funding decisions. GAO's commitment to 
good government is reflected in its core values of accountability, 
integrity, and reliability. 

Obtaining Copies of GAO Reports and Testimony: 

The fastest and easiest way to obtain copies of GAO documents at no 
cost is through the Internet. GAO's Web site ( www.gao.gov ) contains 
abstracts and full-text files of current reports and testimony and an 
expanding archive of older products. The Web site features a search 
engine to help you locate documents using key words and phrases. You 
can print these documents in their entirety, including charts and other 
graphics. 

Each day, GAO issues a list of newly released reports, testimony, and 
correspondence. GAO posts this list, known as "Today's Reports," on its 
Web site daily. The list contains links to the full-text document 
files. To have GAO e-mail this list to you every afternoon, go to 
www.gao.gov and select "Subscribe to e-mail alerts" under the "Order 
GAO Products" heading. 

Order by Mail or Phone: 

The first copy of each printed report is free. Additional copies are $2 
each. A check or money order should be made out to the Superintendent 
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 
more copies mailed to a single address are discounted 25 percent. 
Orders should be sent to: 

U.S. Government Accountability Office 

441 G Street NW, Room LM 

Washington, D.C. 20548: 

To order by Phone: 

Voice: (202) 512-6000: 

TDD: (202) 512-2537: 

Fax: (202) 512-6061: 

To Report Fraud, Waste, and Abuse in Federal Programs: 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm 

E-mail: fraudnet@gao.gov 

Automated answering system: (800) 424-5454 or (202) 512-7470: 

Public Affairs: 

Jeff Nelligan, managing director, 

NelliganJ@gao.gov 

(202) 512-4800 

U.S. Government Accountability Office, 

441 G Street NW, Room 7149 

Washington, D.C. 20548: