On June 30, 2010, the House of Representatives approved the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Financial Reform Act, a comprehensive and expansive set of financial reforms widely thought to be the toughest changes to financial regulation in the United States since the Great Depression.  The Senate approved the Financial Reform Act on July 15, 2010 and President Obama signed it into law on July 21, 2010.  Among the key provisions of the Financial Reform Act is the creation of the Offices of Minority and Women Inclusion, which will be responsible for diversity issues.  This Update highlights the salient features of the Financial Reform Act as it relates to the new Offices of Minority and Women Inclusion.

Agencies Must Establish Offices of Minority and Women Inclusion

Section 342 of the Financial Reform Act requires that each agency listed below establish an Office of Minority and Women Inclusion by January 21, 2011, six months after the date of enactment of the Financial Reform Act.  Each Office of Minority and Women Inclusion will be responsible for "all matters of the agency relating to diversity in management, employment, and business activities."  The agencies that must establish an Office of Minority and Women Inclusion include each of the departmental offices of:

    • the Department of the Treasury,
    • the Federal Deposit Insurance Corporation,
    • the Federal Housing Finance Agency,
    • each of the Federal Reserve Banks,
    • the Board of Governors of the Federal Reserve System,
    • the National Credit Union Administration,
    • the Office of the Comptroller of the Currency,
    • the Securities and Exchange Commission, and
    • the Bureau of Consumer Financial Protection.

Offices Are Tasked with Ensuring the Fair Inclusion and Utilization of Minorities and Women

The Office of Minority and Women Inclusion in each agency must establish standards and procedures to (i) to assess the diversity policies and practices of the entities that the agency regulates and (ii) ensure, "to the maximum extent possible," the "fair inclusion and utilization of minorities, women, and minority-owned and women-owned businesses" at all levels of the agency's business and activities.  These standards and procedures will cover the agency's engagement of service providers, such as financial institutions, investment banking firms, mortgage banking firms, asset management firms, brokers, dealers, financial services entities, underwriters, accountants, investment consultants, and providers of legal services.

Standard Is Unclear, But Contractors Must Meet It.  It is unknown at this time whether the standard for "fair inclusion and utilization" will be different from the standards of nondiscrimination that are currently required in these agencies or from their service providers.  The determination that a contractor or subcontractor has failed to make a "good faith effort" to include women and minorities in its workforce, however, may result in a termination of the contract or other appropriate action. 

Additional Information

This Update is only intended to provide a summary of one section of the Dodd-Frank Wall Street Reform and Consumer Protection Act.


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