How is Your CU’s Diversity Initiative Coming Along?

March 29, 2021 at 9:21 am Leave a comment

As your credit  union emerges from the day-to-day demands of banking during a pandemic its time to start preparing for the issues that are going to impact its regulatory framework in the months and years to come as opposed to those concerns which will fade with the pandemic.

One of the key issues credit unions will continue to face in the coming years is fostering the diversity of their own workforces and boards.  The reckoning may not come as quickly as it will for larger institutions with more resources and spottier track records, but it is coming nonetheless.  

The Dodd-Frank Act included a mandate for financial regulators, including the NCUA, to establish an Office of Minority and Women Inclusion (OMWI) and survey industries on their diversity policies.  Participation is a voluntary but potentially potent weapon for policymakers.  Last week, for example, Representative Maxine Waters demanded that the largest banks do a better job of voluntarily submitting self-assessments of their diversity practices.  She, along with Congresswoman Beatty, stated in a letter to these financial institutions: “We are making progress to ensure a comprehensive understanding of diversity and inclusion performance in the financial services industry.  However, this cannot be achieved until organizations, especially the largest investment managers, disclose their diversity data and policies with the Offices of Minority and Women Inclusion, Congress, and the public.”  The trend isn’t limited to the political branches.

Another less high profile example has to do with board management at the largest banks.  In late February the FRB issued a guidance on best practices for effective board oversight.  In the guidance it explained that an effective process for selecting board members “… considers a diverse pool of potential nominees, including women and minorities.”  The inclusion of this language in the final guidance is a not so subtle nudge for boards to examine their recruitment practices.   

Now, to be clear, neither of those two examples apply to credit unions but sooner or later, your credit union will be expected to have a robust system that maximizes diversity within its employment and leadership ranks. It’s another one of those initiatives that can either be thoughtfully implemented or hastily complied with.

New York Introduces A Cannabis Legalization Bill

Late Saturday night the legislature introduced this 113 page bill signaling that it had reached agreement on a framework for legalizing the use and sale of recreational marijuana in New York State.  The law also provides guidance on issues related to hemp.  Enjoy the reading.

Entry filed under: Compliance, New York State, Regulatory. Tags: , , , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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