The Dodd-Frank Wall Street Reform and Consumer Protection Act brought the most significant changes to financial regulation in the United States since the regulatory reform that followed the Great Depression, and it also contains key regulations to incorporate diverse businesses into financial regulatory agencies. Section 342 of Dodd-Frank requires certain financial regulatory agencies to establish Offices of Minority and Women Inclusion (OWMIs) to examine the diversity practices of their respective contractors and subcontractor. Although there are no quotas for contracts, referrals can be made to Office of Federal Contract Compliance Programs and contracts can be terminated if adequate efforts are not made.
In compliance with this legislation, the Department of the Treasury announced plans for a new clause in all contracts that requires companies that win work with the department to “make good faith efforts to include minorities and women in its workforce”.
But how is diversity really being used in the practice of Dodd-Frank? Here are some direct quotes from members of the financial industry from Mortgage News Daily. “We see a real market need for diverse suppliers, and all small businesses for that matter, to have access to capital at a reasonable cost and assistance in satisfying the rigorous counterparty requirements imposed on them by government agencies, large systems integrators and financial institutions,” says Mark DeGennaro of The Collingwood Group, which as its own page of Diverse Supplier Services.
Jay Patel with Salataris comments “In the past few months, we have seen a significant increase in vendor and supplier diversity questionnaires. Both vendors and suppliers are required to put together policies and procedures in order promote diverse business participation for clients they want to do business with. The questions range from requiring vendors and suppliers to put a dollar and percentage goal of supplier diversity to providing a list of existing diverse suppliers currently used. What I am seeing is both vendors and suppliers are unsure of how to verify whether or not their vendors and suppliers hold any form of diverse supplier certification. As we know, the CFPB will begin asking regulated entities the same questions in the upcoming months to ensure their interests are aligned with the CFPB Office of Minority and Women Inclusion. In essence, vendors and suppliers should begin taking a look at their vendors and suppliers and begin asking whether or not they have any diverse supplier cert.”
So, looks like its a great time to get involved with these agencies and contractors, and certification is a definite plus.