Today a number of Obama administration agencies with financial-sector regulatory responsibilities have jointly published in the Federal Register a proposed “Policy Statement Establishing Joint Standards for Assessing the Diversity Policies and Practices of Entities Regulated by the Agencies.” The statement comes as a result of Section 342 of the Dodd-Frank legislation, which requires these agencies each to “establish an Office of Minority and Women Inclusion” that, in turn, is to develop diversity and inclusion standards for workplaces and contracting.
The proposed statement is even worse than the bill itself, since it aggressively applies not only to the agencies themselves but also to all those regulated by it, and repeatedly insists on the use of “metrics” and “percentage[s]“ (i.e., numerical quotas) to ensure compliance. And while the statute at least cautions that diversity efforts are to be undertaken “in a manner consistent with the applicable law” (like the Constitution and, presumably, federal civil-rights statutes that are colorblind in their protection against discrimination), there is no such nod in the proposed statement, nor is there any mention of stopping or preventing discrimination – the only possible justification for consideration of race, ethnicity, and sex in hiring, promotion, and contracting.
This provision of the statute was championed most prominently by Representative Maxine Waters (D., Calif.) and has been criticized by the Wall Street Journal, four members of the U.S. Commission on Civil Rights, Diana Furchtgott-Roth, Hans Bader, and myself, among others (I also wrote a short summary of Section 342 here, and Christopher Byrnes wrote a much more comprehensive analysis of the statute, here). Comments on the proposed statement are due by Christmas Eve.