We have previously written about Section 342 of the Dodd-Frank legislation, at the time a little-noticed portion of the broad financial reform bill that requires the financial regulatory agencies to set up Offices of Minority and Women Inclusion (OMWI offices).
Now, due to our efforts and the efforts of many others, Section 342 is becoming better known. All of the agencies have now established these offices, which are intended to act as internal watchdogs that will stir the agency to hire more women and minorities as employees and to select more of them for contract opportunities.
But it’s not enough just to set up such an office. The office needs to have enough clout within the agency to bring about the important goal of increasing the participation of women and minorities in the regulation of the financial services industry and in the industry itself. Many people think that one reason that minorities and women suffered most from the financial meltdown a few years ago is that their interests and experiences weren’t well reflected in the agencies that keep tabs on Wall Street.
In this connection, the Greenlining Institute, a national policy, research, organizing, and leadership institute working for racial and economic justice, just completed a diversity survey of all 20 agencies covered by Section 342 to see how far they have to go to achieve the goals of that provision. Only 15 of the agencies provided enough detailed data to the institute to allow a thorough analysis and comparison.
Preeti Vissa, director of the institute’s Community Reinvestment Program, wrote an article in the Huffington Post on Feb. 15, 2012, summarizing the results of the study. The full study can be found here.
As might be expected, the study concluded that the agencies have a considerable distance to go.
“The percentage of people of color classified as ‘executive managers’ by the regulatory agencies is significantly lower than their availability in the civilian labor force,” Vissa wrote. The study did find, however, that African Americans “are the best represented of all people of color, with African American executives in eleven out of fifteen agencies. In six of these agencies, they comprise between 10.0 and 14.3 percent of the executive management category.” The agencies’ record in hiring other minority members was much weaker.
The study recommended that the OMWI directors “adopt a two-pronged approach to diversifying the workforces of their respective agencies. The first approach must focus on recognizing, evaluating, and overcoming the particular challenges that individual agencies face in minority recruitment and retention. The second must employ systemic policies, practices, and programs to address lack of diversity in executive management and the underrepresentation of Latinos, Native Hawaiians/Pacific Islanders, and Native Americans. This two-pronged approach will help to close the diversity gap on both an agency-specific and systemic level.”
We agree that targeted and systemic efforts are needed. We are also very pleased that Section 342 is beginning to attract the attention that it deserves.