Will the NCUA and CFPB’s Offices of Minority and Women Inclusion Affect your CU?

The Dodd-Frank Act required all of the federal banking agencies to establish an Office of Minority and Women Inclusion (“OMWI”).  Both the NCUA and the CFPB have established their offices, and, with the CFPB’s recent selection of former EEOC leader Stuart Ishimaru, both now have a director in place.  So what can credit unions expect from this new office?

First off, to be clear, the CFPB’s OMWI will not have direct authority over the vast majority of credit unions.  That responsibility lies with the NCUA.  I only mention the CFPB because any action taken by the OMWI will likely be an interagency action, and the CFPB will have an important seat at the table.

So what will the OMWI do?  Dodd-Frank requires the OMWI to establish standards for:

• Equal employment opportunity and the racial, ethnic and gender diversity of the workforce and senior management of the agency;
• Increased participation of minority-owned and women-owned businesses in the agency’s programs and contracts; and
• Assessing the diversity policies and practices of the agency’s regulated entities.

(See CFPB Press Release).  The first two tasks will not directly affect credit unions.  They are concerned with diversity standards within the agencies and in how the agencies award contracts and establish programs.  The last task, which is vaguely stated, is the one that could directly affect your credit union.  It could open the door to regulations or guidance on diversity policies and procedures at your credit union.  As of now the agencies are still in the assessment stage and have not proposed any rules or guidance on the issue.  It is not clear where this is going, but it is clear that it is going somewhere and is something you should keep your eye on, particularly if you are a credit union with more than 50 employees. 

To get an idea of what the NCUA Office of Minority and Women Inclusion has done so far, and where it may be going, take a look at its 2011 Report to Congress.  Pay particular attention to Part III beginning on Page 10.  That is where they report on their efforts to develop standards for assessing credit union diversity policies and procedures.