Regulated entities should be aware that on August 2, 2016, the Federal Reserve, Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation published a "Frequently Asked Questions" (FAQ) guide outlining the process for regulated entities to conduct voluntary self-assessments of workplace diversity. The FAQ guide relates to the Joint Diversity Standards issued in 2015 under the Dodd-Frank Act, which provide a framework for assessing, establishing, and/or strengthening diversity policies and practices.
Reporting. The FAQ guide notes that self-assessments and reports to financial regulators regarding the assessments are "strongly encouraged" notwithstanding the fact that the Joint Diversity Standards describe them as voluntary. Likewise, regulated entities are encouraged to provide information regarding their self-assessments to the Director of the Office of Women and Minority Inclusion of the entity's primary federal financial regulator on an annual basis and within 90 days of the close of the calendar year.
Publication. The FAQ guide encourages regulated entities conducting self-assessments to publish information regarding their efforts on their websites and in other forms of communications.
Scope. Regulated entities may use broader definitions of "diversity" than set forth in the Standards and may include topics, data, and information in their self-assessment not explicitly included in the Standards.
Evaluation. According to the FAQ guide, federal financial regulators will not assess an entity's policies and practices, as entities are in the best position to make these assessments. Entities are encouraged to conduct self-assessments, however, to identify areas of strength and weakness. Agencies may provide guidance to the extent that entities request the same.
Notably, of the six agencies that issued the Joint Diversity Standards, only three joined in publishing the FAQ guide. Without explanation, the National Credit Union Administration, the Consumer Financial Protection Bureau, and the Securities and Exchange Commission did not join in the publication.
Covered entities should consult the FAQ guide and legal counsel to determine whether to undertake self-assessments, publish information regarding the assessments, and report to the government regarding the assessments.