Federal banking regulators are offering more detail on a requirement that the institutions they oversee submit self-assessments of their diversity policies and practices.
The Dodd-Frank Act required federal financial regulatory agencies to establish an Office of Minority and Women Inclusion, tasked with assessing the diversity policies and practices of regulated institutions. On July 13, 2016, the Office of Management and Budget had approved the collection of the voluntary self-assessment information.
Among the maters addressed in the guidance:
The policy statement defines “diversity” to refer to minorities and women. In conducting its self-assessment, can an entity expand this definition to include other groups?
[It] does not preclude an entity from using a broader definition of diversity. The language is intended to be sufficiently flexible to encompass other groups if an entity wants to define “diversity” more broadly.
In conducting a self-assessment, is an entity limited to the standards or can other topics, data, or information be considered as well?
A regulated entity’s self-assessment can cover topics and include information and data beyond what is in the policy statement and standards. However, agencies recommend that, at a minimum, a self-assessment cover each of the standards discussed in the policy statement.
Will an entity’s diversity policies and practices be assessed by its primary regulator?
An entity’s diversity policies and practices will not be assessed by its primary federal financial regulator. The agencies believe the entities are in the best position to assess their own diversity policies and practices, and the self-assessments can provide entities with an opportunity to focus on areas of strength and weakness in their policies and programs.
How will the agencies use the self-assessment information provided by the regulated entities?
The agencies may use the self-assessment information provided by the entities to monitor progress and trends in the financial services industry with regard to diversity and inclusion in employment and contracting activities. The Agencies may highlight successful policies and practices. They may publish information disclosed to them, such as best practices, in any form that does not identify a particular entity or individual or disclose confidential business information.
Financial institutions were encouraged to disclose on their websites their diversity policies and practices, as well as information related to their self-assessments, to maximize transparency, and to provide their policies, practices, and self-assessment information to their primary federal financial regulator.
Additional information, with detailed submission instructions, will be provided at a later date directly to the institutions.