CUNA told the NCUA in a comment letter on Friday that the agency’s proposed diversity standards would place a burden on credit unions.
The extended comment period for the standards for the NCUA and several other agencies ended Friday.
“Congress provided only very narrow authority to the agencies under the Dodd-Frank Act regarding diversity issues at financial institutions. To impose new requirements or seek to enforce new standards under the Act would be contrary to the directives of Congress,” wrote Mary Dunn, CUNA deputy general counsel, in the letter to Gerard Poliquin, secretary of the board at the NCUA.
Dunn cited a portion of the law that said subsection 342(b)(2)(C) “may be construed to mandate any requirement on or otherwise affect the lending policies and practices of any regulated entity, or to require any specific action based on the findings of the assessment.”
Based on that part of the law, Dunn said an “overall approach that does not result in new regulations, additional enforcement powers for the agencies, or provide further support for private causes of action against covered entities is the only approach consistent with the intent and language of the Dodd-Frank Act.”
The Dodd-Frank Act, signed by President Obama in 2010, required the NCUA, the Fed, the OCC, the FDIC, the CFPB and the SEC to establish an Office of Minority and Women Inclusion which would develop standards for assessing the diversity policies and practices within the entities they regulate.
Dunn said the diversity standards would place manual reporting requirements on credit unions.
“It would likely mean that a number of credit unions would be required to gather employee-related diversity data manually. For credit unions, this would likely require significant resource expenditures when many are already struggling to comply with the onslaught of recent and forthcoming regulations, including those under the Dodd-Frank Act,” Dunn wrote.
As a result, Dunn said CUNA urges the NCUA and the other regulators to “limit the applicability of the standards under Section 342 to EEOC-reporting institutions.”