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NCUA, bank regulators issue final diversity standards for FIs

Mon, Jun 22, 2015

Washington, District Of Columbia

The National Credit Union Administration and federal banking regulators issued their final interagency policy statement establishing joint standards for assessing diversity policies and practices of the institutions they regulate.

Required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the statement applies to those regulated by NCUA, the Federal Reserve Board, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, and the Securities and Exchange Commission.

Each agency was required to establish an Office of Minority and Women Inclusion (OMWI), responsible for all diversity matters in management, employment and business activities. The act also instructed that each OMWI director develop standards for assessing diversity policies and practices of the entities regulated by the agencies. 

The final standards are similar to the proposed standards and provide a framework for regulated entities to create and strengthen their diversity policies and practices, the agencies said. These include their organizational commitment to diversity, workforce and employment practices, procurement and business practices, and practices promoting transparency of organizational diversity and inclusion within the entities’ U.S. operations.

The agencies’ assessments of regulated entities’ diversity policies will not be a part of the examination or supervisory process. Instead, they will rely on a “model assessment” that would include a self-assessment by the entity. Financial institutions’ self-assessment would use the proposed standards, voluntary disclosure of their assessment to the regulator, and publication of their diversity efforts to increase public awareness and understanding.

The entities “are in the best position to assess their own diversity policies and practices,” the policy stated, adding that “self-assessments can provide entities with an opportunity to focus on areas of strength and weakness in their own policies and programs.” The agencies will periodically review the public information and reach out to the institutions to discuss diversity and inclusion.

The policy reflects more than 200 comments submitted on the proposed standards that were issued in 2013.

Standards may be tailored and used in a manner reflective of the institution’s size and other characteristics. “The agencies recognize that each entity is unique with respect to characteristics such as its size, location, and structure,” the policy said.

The policy indicated that the Dodd-Frank Act states the directive to develop standards may not be construed to mandate any requirement on or otherwise affect the lending policies and practices of the institution regulated or require specific action based on the findings of the assessment. “This document is a general statement of policy under the Administrative Procedure Act, 5 U.S.C. 533. It does not create new legal obligations. Use of the standards by a regulated entity is voluntary,” said the policy.

“Diversity” is defined as women and minorities (Black Americans, Native Americans, Hispanic Americans and Asian Americans). The policy does not preclude an entity from using a broader definition related to the standards.

“Inclusion” is defined as “a process to create and maintain a positive work environment that values individual similarities and differences, so that all can reach their potential and maximize their contributions to an organization.”

The agencies also: 

  • Noted that the senior official responsible for an entity’s diversity and inclusion efforts preferably should have relevant knowledge and experience;
  • Provided examples of how an entity could promote fair inclusion in its workforce and noted many evaluate their business objectives using analytical tools to track and measure workforce inclusiveness;
  • Set standards to assess an entity’s workforce profile and employment practice, which included using data from EEO-1 Reports and Affirmative Action Plans, as well as other metrics. The agencies noted that EEO-1 Report and AAP data may be limited, especially for entities with large workforces and those that broadly define diversity, but that data can be used as a baseline supplemented with other analytical tools;
  • Revised the proposed standards to clarify that both quantitative and qualitative measurements are important; and
  • Addressed whether management is held accountable for these efforts and creates diverse applicant pools for workforce opportunities when hiring from within and outside the organization.


Source: CUNA