The CFPB Announces Final Diversity Standards under Dodd-Frank Section 342 Are Completed

On April 29, 2015, the Office of Minority and Women Inclusion (OMWI) of the Consumer Financial Protection Bureau (CFPB or Bureau) released its third Annual Report for 2014, as mandated by Section 342(e) of the Dodd-Frank Act (Act). Among other things, Section 342 requires each OMWI covered by the Act to report on its diversity efforts in the past year and develop standards for assessing the diversity policies and practices of entities regulated by the agency.

In the Report, the CFPB stated that the six agencies under Dodd-Frank have completed the final diversity policy statement, which now is undergoing final approval by the agencies, signaling that release of the final standards may be imminent. In addition, the CFPB announced that it has united the OMWI and the Office of Civil Rights (formerly the Equal Employment Opportunity Office) under a newly formed Office of Equal Opportunity and Fairness to report directly to CFPB Director Richard Cordray. Director Cordray noted combining these offices "reinforces the importance of equity, diversity, and inclusion in all of the CFPB's work."

The balance of the Report addresses measures the CFPB has taken to further principles of diversity within the agency. Regulated entities under the CFPB should take note of these measures, as they suggest steps the CFPB may expect entities to take within their own organizations under the diversity standards. From a governance and workforce perspective, these measures include:

  • An Executive Advisory Council to provide input into OMWI programming and to serve as champions for diversity and inclusion initiatives;
  • A Diversity and Inclusion Council consisting of employees from across the Bureau to advise OMWI on internal, employee-focused issues related to diversity and inclusion;
  • A draft policy and guidance for employees to establish employee resource/affinity groups;
  • Bureau-wide listening sessions to learn more about the employee experience and concerns about diversity, inclusion equality, and fairness;
  • Diversity and inclusion training for employees across all levels and mandatory equal opportunity training for managers;
  • Enhanced supervisory and leadership training for supervisors and managers to ensure the Bureau expands skills and competencies of those required to function at higher levels;
  • Divisional strategic goals, leadership goals, and individual employee competencies focusing on diversity and inclusion within each of the functional areas of the Bureau to build accountability throughout the organization;
  • Training on hiring processes and methods to maximize diversity and inclusion in hiring, including multi-person resume review and diverse interview panels;
  • Language in all job announcements to ensure potential applicants understand the Bureau's commitment to a diverse and inclusive workplace;
  • Strategic partnerships with colleges, universities, professional organizations, and affinity groups from across the country;
  • Targeted recruitment and outreach to affinity groups, minority- and women-serving institutions, and other minority- and women-focused professional organizations, to build a diverse applicant pool; and
  • Increased communication flow and channels to employees through the OMWI newsletter, the CFPB intranet, as well as e-mails from the Director and the OMWI Director to all staff.

In connection with its efforts to increase supplier diversity, the CFPB focused on ensuring minority- and women-owned businesses are aware of the Bureau's work and procurement opportunities by implementing the following initiatives:

  • Establishing and developing relationships with key business stakeholders, industry groups, and trade groups;
  • Placing the OMWI Director and other OMWI staff for speaking opportunities on panels at events for diverse suppliers;
  • Distributing educational material aimed at minority- and women-owned businesses;
  • Collaborating with the Office of Procurement on a series of outreach events targeted at minority- and women-owned businesses; and
  • Establishing recurring Supplier Diversity Procurement Workshops.

In addition, the report contains metrics about the extent to which CFPB's workforce and procurement programs are inclusive of minorities and women.

Upon release of the final diversity standards governing regulated entities, Ballard Spahr will issue an Alert summarizing the standards.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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