In the wake of the financial crisis a few years back, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which focused on an overhaul of federal financial regulations. What does that have to do with affirmative action and OFCCP? Well, buried on page 166 of the Act are new obligations imposed on federal financial agencies to evaluate the EEO and diversity in the workforces of contractors who work with the agencies. On October 25, 2013, six of these agencies – the Comptroller of the Currency, the Federal Reserve System, the FDIC, the NCUA, the Consumer Financial Protection Bureau, and the SEC – published a Proposed Interagency Policy Statement Establishing Joint Standards for Assessing the Diversity Policies and Practices of Entities.
The proposed standards allow the six federal agencies to investigate contractors regarding their commitment to diversity, fair employment practices, and supplier diversity. If an agency determined that a contractor or subcontractor has failed to make sufficient good‑faith efforts to include minorities and women in its workforce, it may terminate the federal contract, refer the matter for investigation to OFCCP, or take other appropriate action.
Many financial industry employers are unaware of this part of the Dodd-Frank law. But, it serves as a reminder that financial entities – including investment firms, asset management firms, banks, brokers, and investment consultants – may fall within OFCCP jurisdiction . . . and that other government agencies apart from OFCCP and EEOC also are monitoring your EEO and affirmative action efforts.
Financial industry employers should review the requirements of the proposed standards and consider what steps to take.