Interagency Rule Requires Diversity Self-Assessments
NCUA Chairman Debbie Matz said the NCUA is working to promote a more diverse workforce, and she encouraged credit unions to ensure that their employees and volunteers reflect the groups they are chartered to serve.
The Dodd-Frank Act requires each financial services regulator to establish an Office of Minority and Women Inclusion. Each OMWI director must develop standards that assess the diversity policies and practices of the institutions it regulates per the law.
“Within NCUA, we’re working to promote a more diverse workforce and to consider minority- and women-owned firms when we contract for services,” Matz said.
The NCUA, Consumer Financial Protection Bureau, Federal Reserve, FDIC, Comptroller of the Currency and the Securities and Exchange Commission all proposed similar diversity standards per Dodd-Frank.
“In developing these standards, the Agencies took into account individual entities’ circumstances (for example, asset size of the entity, number of employees, governance structure, income, number of members and/or customers, contract volume, geographic location, and community characteristics),” said the Oct. 24 Board Action Memorandum.
In Thursday’s board meeting, Matz said the examination process would not be used to assess diversity. Credit unions with at least 100 employees are required to report diversity self-assessments, which the NCUA will use to prepare an annual report for Congress.
Approximately 600 federally insured credit unions have more than 100 employees, the NCUA said.
“Expanding diversity is not only the right thing to do; it’s good business,” Matz said. “We encourage credit unions to ensure their boards and staffs reflect their memberships.”
The standards include four categories: organizational commitment to diversity and inclusion; workforce profile and employment practices; procurement and business practices—supplier diversity; and, practices to promote transparency of organizational diversity and inclusion.
Among the standards is a requirement for the entity to take “proactive steps to promote a diverse pool of candidates, including women and minorities, in its hiring, recruiting, retention, and promotion, as well as in its selection of board members, senior management, and other senior leadership positions.”