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Agencies Assess Diversity

Six federal financial regulatory agencies, including the SEC, have proposed joint standards for assessing the diversity policies and practices of the institutions they regulate.  The Dodd-Frank Act required the agencies (the Office of the Comptroller of the Currency, the Federal Reserve, FDIC, National Credit Union Administration, the Bureau of Consumer Financial Protection and the SEC) to develop these standards, although required no “specific action based on the findings of the assessment.”

The proposed standards in the Interagency Policy Statement are intended to promote transparency and awareness of diversity policies and practices within the regulated entities, recognizing that “greater diversity and inclusion promotes stronger, more effective and more innovative businesses, as well as opportunities to serve a wider range of customers.”

The assessment standards cover four key areas:

•    Organizational commitment to diversity and inclusion.
•    Workforce profile and employment practices.
•    Procurement and business practices and supplier diversity.
•    Practices to promote transparency of organizational diversity and inclusion.

The proposal explicitly states that the agencies “will not use the examination or supervision process in connection with these proposed standards.”  However, in a statement issued in connection with the proposal, SEC Commissioner Aguilar asked for comments as to whether an agency should “utilize site visits or otherwise exercise its examination and supervisory powers in connection with the standards and assessments set forth in the Proposed Policy Statement.”   The proposal explicitly relies upon only voluntary disclosure of each regulated entity’s assessment.  This disclosure may be made to the relevant agency, as well as on the regulated entity’s website.

The comment period on the Interagency Proposal will last for 60 days after it is published in the Federal Register.

The proposal may be found here. Commissioner Aguilar’s statement may be found here