Feds Set New Roadmap for Diversity and Inclusion in Financial Sector
Author: Michael Cardman, XpertHR Legal Editor
June 12, 2015
Six federal agencies recently issued new standards for fostering diversity and inclusion in banks, mortgage companies and other employers regulated by the Dodd-Frank Wall Street reform law.
Although the standards are purely voluntary, covered employers should make an effort to meet them, according to Dee Spagnuolo, a partner in the Philadelphia office of Ballard Spahr LLP.
"It's not just the right thing to do; we know that diversity and inclusion is good for business," she said, noting that workforce diversity has been shown to promote collaboration and creativity.
Following the standards also can help an employer show good faith to the six agencies that issued them: the Securities and Exchange Commission (SEC), the Bureau of Consumer Financial Protection (CFPB), the Office of the Comptroller of the Currency; the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the National Credit Union Administration.
"Nobody wants to be in front of their regulator and say, 'we chose not to comply,' whether it's during an investigation or when you're doing something proactive and you want to demonstrate what a good corporate citizen you are," Spagnuolo said.
The standards are grouped into four main areas:
- Commitment - getting senior leadership to buy in; adopting a formal policy; conducting training;
- Employment Practices - incorporating diversity and inclusion into recruiting, hiring, promotion and retention;
- Procurement - adopting policies to provide a fair opportunity for minority-owned and women-owned businesses when procuring goods and services; and
- Transparency - annually assessing diversity and inclusion efforts and then publicly publishing the results.
In a dissent, SEC Commissioner Luis A. Aguilar predicted that few regulated entities will comply with the standards because they are voluntary. He also said the standards' definition of diversity - referring only to Black Americans, Native Americans, Hispanic Americans, Asian Americans and women - is too narrow because it excludes people with disabilities and the lesbian, gay, bisexual and transgender (LGBT) community.