Members of Ballard Spahr’s Consumer Financial Services group recently participated in the American Bar Association Business Law Section Annual Meeting held in Boston, Massachusetts. On September 8, Ballard partner, Dee Spagnuolo, joined Director Stuart Ishimaru of the CFPB’s Office of Minority and Women Inclusion, and other industry leaders for a panel discussion entitled, “Diversity and Dodd-Frank Section 342.”
The program included an informative discussion of the history of Section 342 of the Dodd-Frank Act, examined its effect on the industry, and provided guidance on how regulated entities might best comply with the Joint Diversity Standards issued in June 2015.
As part of his remarks, Director Ishimaru emphasized that, while the Standards themselves are not mandatory, regulated entities should follow their guidance because diversity and inclusion (D&I) policies and practices make “business sense.” The Director noted that in an increasingly diverse world, D&I initiatives open opportunities in new markets and provide exposure to innovation and diversity of thought. With respect to organizational commitment to D&I, the Director encouraged the leadership at regulated entities to play an integral role in articulating and advancing their organizations’ D&I plans.
The panel also engaged in a thoughtful discussion about transparency with respect to a regulated entity’s successes and challenges in promoting D&I. Ms. Spagnuolo noted that annual reports submitted to regulators, such as the CFPB, may be subject to production under the Freedom of Information Act (FOIA). Director Ishimaru expressed the view that FOIA should not deter an organization from sharing its annual reports with regulators because such reports are accessible through other means, such as discovery requests in litigation. The Director invited regulated entities to be more transparent about their D&I efforts and to increase communication with regulators, with their communities, and with their own workforce.
Finally, with respect to the definition of “diversity” set forth in the Joint Standards, which focuses on minorities and women, several panelists encouraged regulated entities to use a broader definition of “diversity” to include, for example, veterans, LGBT, or people with disabilities. The Director concurred with that advice, but reminded entities to ensure that the representation of minorities and women is not lost in more expansive programs.