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Dodd-Frank Act requires Office of Minority and Women Inclusion for covered agencies

August 24th, 2010  |  Cynthia L. Hackerott

Tucked within the broad package of financial industry reforms contained in the Dodd-Frank Wall Street Reform and Consumer Protection Act (H.R. 4173 / Public Law 111-203) is a provision that mandates that each covered governmental agency establish an Office of Minority and Women Inclusion (OMWI) to “be responsible for all agency matters relating to diversity in management, employment and business activities.”  Section 342 (contained within Subtitle D) of the Act requires each OMWI to monitor the diversity efforts of the agencies, the regulated entities and agency contractors. In cases where an OMWI director determines an agency contractor has failed to make a good-faith effort to include minorities and women in their workforce, the agency head may refer the matter the OFCCP or take other appropriate action, including termination of the applicable contract.

Contracts. The OMWI directors must develop and implement standards and procedures to ensure, to the maximum extent possible, the fair inclusion and utilization of minorities, women, and minority-owned and women-owned businesses in all business and activities of the agency at all levels, including in procurement, insurance, and all types of contracts (Section 342(c)(1)).

The procedures established by each agency for review and evaluation of contract proposals and for hiring service providers must include, to the extent legally permissible, a component that gives consideration to the diversity of the applicant. These procedures must include a written statement that a contractor “shall ensure, to the maximum extent possible, the fair inclusion of women and minorities in the workforce of the contractor and, as applicable, subcontractors” (Section 342(c)(2)).

The statute requires each agency to establish a procedure for its OMWI director to make a determination whether an agency contractor, and, as applicable, a subcontractor has failed to make a good-faith effort to include minorities and women in their workforce. If an OMWI director makes such a determination, the director must make a recommendation to the agency head that the contract be terminated. Upon receipt of such a recommendation, the agency head may: (a) terminate the contract; (b) make a referral to the OFCCP; or (c) take other appropriate action  (Section 342(c)(3)).

Duties within the agency. Within their respective agencies, Section 342(b)(2) requires the  OMWI directors to develop standards for: (a) equal employment opportunity and the racial, ethnic, and gender diversity of the workforce and senior management of the agency; (b) increased participation of minority-owned and women-owned businesses in the programs and contracts of the agency, including standards for coordinating technical assistance to such businesses; and (c) assessing the diversity policies and practices of entities regulated by the agency.

In addition, each OMWI director is charged with advising his/her respective agency head on the impact of the policies and regulations of the agency on minority-owned and women-owned businesses (Section 342(b)(3)).

Reports. Each OMWI must submit to Congress an annual report regarding the actions taken by the agency and the OMWI pursuant to Section 342 including: (1) a statement of the total amounts paid by the agency to contractors since the previous report; (2) the percentage of these amounts that were paid to covered contractors; (3) the successes achieved and challenges faced by the agency in operating minority and women outreach programs; (4) the challenges the agency may face in hiring qualified minority and women employees and contracting with qualified minority-owned and women-owned businesses; and (5) any other information, findings, conclusions, and recommendations for legislative or agency action, as the OMWI director determines appropriate (Section 342(e)).

Other diversity requirements. Each agency is also required to take steps to seek diversity, to the extent legally permissible, in the workforce of the agency at all levels of the agency, including: (1) recruiting at historically black colleges and universities, Hispanic-serving institutions, women’s colleges, and colleges that typically serve majority-minority populations; (2) sponsoring and recruiting at job fairs in urban communities; (3) placing employment advertisements in newspapers and magazines oriented toward minorities and women; (4) partnering with organizations that are focused on developing opportunities for minorities and women to place talented young minorities and women in industry internships, summer employment, and full-time positions; (5) where feasible, partnering with inner-city high schools, girls’ high schools, and high schools with majority minority populations to establish or enhance financial literacy programs and provide mentoring; and (6) any other mass media communications that their respective OMWIs determines are necessary (Section 342(f)).

Duties not included. However, the OMWIs’ responsibilities do not include enforcement of statutes, regulations, or executive orders pertaining to civil rights, except each OMWI Director shall coordinate with the agency administrator, or the designee of the agency administrator, regarding the design and implementation of any remedies resulting from violations of such statutes, regulations, or executive orders (Section 342(a)(3)).

Agencies that are required to establish OMWIs. Covered agencies under Section 342 include: (1) the Departmental Offices of the Department of the Treasury; (2) the Federal Deposit Insurance Corporation; (3) the Federal Housing Finance Agency; (4) each of the Federal Reserve banks; (5) the Federal Reserve Board; (6) the National Credit Union Administration; (7) the Office of the Comptroller of the Currency; (8) the Securities and Exchange Commission; and (9) the Bureau of Consumer Financial Protection (Section 342(g)).