Reed Smith’s Stephanie Wilson recently told The Legal Intelligencer that she fielded many calls about Dodd-Frank Act’s section 342, which regulates diversity and inclusion in the financial industry, when the law was first passed in 2010. While it was soon “overshadowed” by other, more financially immediate sections, she says the questions about section 342 are starting to return. Her interpretation? “I don't read it to mandate numbers. I do read it to mandate that companies will be ever-vigilant in ensuring that they are doing their utmost in having a diverse and inclusive workforce….and it's not saying you have to have this percentage or that percentage, but it is saying you have to understand we expect you to have a diverse workforce in that you have to expend the efforts in designing policies and programs to ensure that happens." Stephanie added that she expects the final rules to clarify many of section 342’s currently gray areas on diversity and inclusion enforcement.
In October 2013, the Office of the Comptroller of the Currency, Federal Reserve Board, Federal Deposit Insurance Corporation, National Credit Union Administration, Consumer Financial Protection Bureau, and Securities and Exchange Commission proposed joint standards for assessing the diversity policies and practices of the entities they regulate. Section 342 of the Dodd-Frank Act directed the establishment of an Office of Minority and Women Inclusion (“OMWI Office”) in each Agency. Each OMWI Office is headed by a director and is responsible for all Agency matters relating to diversity in management, employment, and business activities. Section 342(b)(2)(C) of the Dodd-Frank Act directs each Agency’s OMWI Director to develop standards for assessing the diversity policies and practices of entities regulated by that Agency. The 2013 proposed interagency policy statement identified these proposed standards and requested comment on all aspects of the statement. A final interagency policy statement is expected.