Diversity Guidance Released
Few things get people as nervous as a conversation about race. In part this reflects the fact that the vast majority of decent people don’t want to be insensitive to the concerns of others, and in part it reflects the fact that issues of race are so complicated that no one really thinks a frank dialogue will bring about much consensus.
The latest entry into this muddled mess of policy confusion is The Joint Guidance on Joint Standards for Assessing the Diversity Policies and Practices of entities that are regulated by federal financial regulators, including the NCUA. It can best be described as a non-mandate mandate. On the one hand, it establishes a suggested framework for financial institutions to use in assessing their efforts towards creating and encouraging a diverse workforce. On the other hand, the guidance stresses that the proposed framework is completely voluntary and geared towards institutions with 100 or more employees which are, not coincidentally, already subject to workforce diversity reporting requirements.
The voluntary framework encourages credit unions to establish: quantifiable standards for assessing their commitment to diversity and inclusion; policies and procedures to foster diversity and inclusion by, for example, reaching out to minority and women’s organizations to expand their applicant pool; and policies for hiring minority contractors. Credit unions should make these efforts as transparent as possible by posting policies to their websites, for example. Credit unions are urged to assess how well they are achieving these goals and are also encouraged, but not required, to share these self-assessments with their regulators.
Does the Guidance apply to small credit unions? On paper yes, but the preamble to the policy statement tells us that: “When drafting these standards, the Agencies focused primarily on institutions with more than 100 employees. The Agencies know that institutions that are small or located in remote areas face different challenges and have different options available to them compared to entities that are larger or located in more urban areas. The Agencies encourage each entity to use these standards in a manner appropriate to its unique characteristics.” I would put this in your file for the day an examiner tries to ding you for not complying with this guidance.
As for those of you who do have at least 100 employees, even though the guidance is wholly voluntary, my guess is you already do much of what is suggested in this guidance. Taking a look at this guidance and incorporating it into your existing practices isn’t a bad idea if only because today’s voluntary guidance may someday become tomorrow’s mandate. This is particularly true if regulators conclude that institutions aren’t doing enough to foster diverse workplaces.