InfoBytes Blog

Waters announces subcommittee chairs, including newly formed Subcommittee on Diversity and Inclusion

On January 24, Chair of the House Financial Services Committee, Maxine Waters, announced that Joyce Beatty (D-OH) will serve as the first Chair of the newly formed Subcommittee on Diversity and Inclusion. According to Waters’ policy speech on January 17, the new Subcommittee will be “dedicated to looking at diversity and inclusion issues under the Committee’s jurisdiction.” Specifically, Waters cited to low representation of minorities and women in the financial services industry, particularly at the management level, as a reason for the creation of the subcommittee. Using the Offices of Minority and Women Inclusion of the federal financial services regulators as an example, Waters suggested that the subcommittee be responsible for overseeing diversity in management, employment, and business activities in the financial industry. In addition to diversity and inclusion, Waters noted that, among other things, fair housing, including conducting “robust oversight” of HUD, and fintech would be top priorities for the subcommittee.

Federal Issues Diversity House Financial Services Committee Congressional Oversight Congressional Inquiry HUD Fintech

CFPB Releases Report on Diversity and Inclusion in the Mortgage Industry, Banking Agencies Attend Roundtable Meeting

On April 27, the Consumer Financial Protection Bureau published its report summarizing strategies intended to promote diversity and inclusion by mortgage industry participants. The report, Diversity and Inclusion in the Mortgage Industry: Readout from an Opening Roundtable, is the result of the Bureau’s collaboration with the financial services industry. The roundtable meeting—led by the Bureau’s Office of Minority and Women Inclusion (OMWI)—convened representatives from the mortgage industry, nonbank financial companies, and OMWI staff from the OCC, FDIC, Federal Reserve, and FHFA. OMWI was a created by Section 342 of the Dodd-Frank Act and charges directors with “increasing diversity in agency programs and contracts, and assessing diversity policies and practices of entities regulated by the agency.” The report highlights issues raised by roundtable participants and stresses the need to develop a “strong business case for diversity and inclusion.” The Bureau’s position on the strategies and practices discussed include the following:

• promoting diversity and inclusion strengthens organizations and improves overall performance;
• building in diversity and inclusion as “fundamental principles” and taking a “tone from the top” approach highlights the importance of leadership buy-in and accountability;
• boosting diversity and inclusion through the recruitment, hiring, retention, and advancement of personnel creates opportunities for more diverse viewpoints;
• promoting a more diverse workforce and tailoring products to the needs of different consumers fosters a greater understanding of the needs of a more diverse customer base; and
• understanding the importance of data collection and analysis supports the business case for diversity.

Consumer Finance CFPB Mortgages Diversity

Federal Banking Agencies Urge Financial Institutions to Conduct Diversity Self-Assessments

On August 2, the Federal Reserve, OCC, and FDIC released FAQs regarding their standards for assessing the diversity policies and practices of regulated entities. Following the June 10, 2015 Federal Register publication titled “Final Interagency Policy Statement Establishing Joint Standards for Assessing the Diversity Policies and Practices of Entities Regulated by the Agencies” (Policy Statement), the FAQs seek to clarify the agencies’ standards for entities conducting self-assessments of their diversity policies. Although self-assessments are voluntary, the banking agencies strongly encourage financial institutions to disclose their diversity policies, diversity practices, and self-assessment information on their websites and provide the same to their primary federal financial regulator.

FDIC Federal Reserve OCC Diversity

Agencies Finalize Diversity Policy Statement

On June 9, six federal agencies – the Federal Reserve, CFPB, FDIC, NCUA, OCC, and the SEC – issued a final interagency policy statement creating guidelines for assessing the diversity policies and practices of the entities they regulate. Mandated by Section 342 of the Dodd-Frank Act, the final policy statement requires the establishment of an Office of Minority and Women Inclusion at each of the agencies and includes standards for the agencies to assess an entity’s organizational commitment to diversity, workforce and employment practices, procurement and business practices, and practices to promote transparency of diversity and inclusion within the organization. The final interagency guidance incorporates over 200 comments received from financial institutions, industry trade groups, consumer advocates, and community leaders on the proposed standards issued in October 2013. The final policy statement will be effective upon publication in the Federal Register. The six agencies also are requesting public comment, due within 60 days following publication in the Federal Register, on the information collection aspects of the interagency guidance.

FDIC CFPB Dodd-Frank Federal Reserve OCC NCUA SEC Diversity Agency Rule-Making & Guidance

Financial Regulators Propose Framework for Assessing Diversity At Financial Firms

On October 23, the CFPB, the OCC, the FDIC, the Federal Reserve Board, the NCUA, and the SEC proposed joint standards for assessing the diversity policies and practices of regulated institutions. Section 342 of the Dodd-Frank Act required the Office of Minority and Women Inclusion (OMWI) at each agency to develop the standards. The Act specifically prohibits the standards from imposing requirements on or otherwise affecting the lending policies and practices of any regulated entity, or requiring any specific action based on the findings of an assessment, and the agencies state that the assessments will not occur within the standard examination or supervision process. The standards, which the agencies believe are designed to promote “transparency and awareness,” cover four general areas: (i) organizational commitment to diversity and inclusion, (ii) workforce profile and employment practices, (iii) procurement and business practices to promote supplier diversity, and (iv) practices to promote transparency of organizational diversity and inclusion. The agencies state that the standards account for variables including asset size, number of employees, governance structure, income, number of members or customers, contract volume, location, and community characteristics, and the agencies recognize the standards may need to change and improve over time. The proposed standards are subject to a public comment period, which will run for 60 days once they are published in the Federal Register.

FDIC CFPB Federal Reserve OCC NCUA SEC Diversity

CFPB Updates Status of Standard for Assessing Diversity at Supervised Institutions

On March 29, the CFPB’s Office of Minority and Women Inclusion (OWMI) published its annual report about the CFPB’s diversity and inclusion efforts from January 1, 2012 until December 31, 2012. The Dodd-Frank Act created the CFPB OWMI and similar offices at other federal financial regulatory agencies and tasked each office with advising its agency head on the impact of the policies and regulations of the agency on minority-owned and women-owned businesses, and developing standards for (i) equal employment opportunity and the racial, ethnic, and gender diversity of the agency workforce and senior management; (ii) increased participation of minority-owned and women-owned businesses in the programs and contracts of the agency; and (iii) assessing the diversity policies and practices of entities regulated by the agency. With regard to regulated entities, the report notes that in February 2013 the CFPB entered into a Memorandum of Understanding with the Equal Employment Opportunity Commission to access employment demographic survey data, which will provide a starting point to analyze the composition of regulated entities. The CFPB also reports that the various OWMIs are developing a common standard for assessing the diversity policies and practices of regulated entities and plan to publish draft standards for comment sometime in 2013.

CFPB Diversity