Members of the subcommittee have been circulating draft legislation that would make it mandatory for financial institutions to file annual surveys with their regulators.

Monica Hughes Davy

In their annual diversity report to Congress, NCUA officials said that only 118 of the nation's 5,236 credit unions submitted the survey to the agency. Still, that number has increased each year the survey has been circulated. Davy said that in 2016, the first year the survey was circulated, only 35 credit unions responded.

"We continue to promote the Self-Assessment among federally insured credit unions, and the NCUA Board is considering ways to incentivize credit union participation in the assessment," she told the subcommittee.

Tuesday's hearing featured the directors of the each of the financial regulators' directors of the Offices of Minority and Women Inclusion.

On a particularly controversial issue, Davy and the other directors said they have not been directed to stop any diversity training sessions at their agencies as a result of a recent order issued by the Office of Management and Budget.

On Friday, OMB Director Russell Vought sent a memo to federal agencies directing them to identify any training on "critical race theory 'white privilege,' or any other training or propaganda effort that teaches or suggests either (1) that the United States is an inherently racist or evil country or (2) that any race or ethnicity is inherently racist or evil."

He referred to such sessions as propaganda and said the administration will be issuing a more specific directive.

"These types of 'trainings' not only run counter to the fundamental beliefs for which our Nation has stood since its inception, but they also engender division and resentment within the Federal workforce," Vought wrote.

The NCUA, as an independent agency, is not subject to OMB memoranda or Executive Orders issued by the president, but agency officials have often said they are following the "spirit" of such documents.

Democrats were quick to condemn the Vought memo.

"I'm very disturbed by what the president has done," Rep. Al Green (D-Texas) said during Tuesday's hearing. He said that President Trump will do "all that he can" to thwart diversity efforts.

In her testimony, Davy reaffirmed the NCUA's commitment to diversity, equity and inclusion.

"When it comes to the NCUA's ability to carry out its mission to regulate and supervise the nation's federally insured credit union system effectively, a commitment to the values of diversity, equity and inclusion, or DEI, is vital," she told the subcommittee. "This is why the NCUA is focused on incorporating these values throughout the agency's strategic priorities and workforce."

She reminded subcommittee members that the NCUA hosted its first DEI Summit last year, an event that drew more than 150 people.

In addition, Davy said the agency is committed to supporting Minority Depository Institutions, which she said often are the only federally insured financial institution in rural and urban communities.

Davy said that racial diversity is improving at the NCUA. In 2015, minorities accounted for 26.9% of the agency's workforce; that improved to 29.9% in 2019.

She said the agency's senior staff diversity has improved as well. In 2015, minorities made up 13.2% of senior staff, compared to 25% in 2019.