Berkshire Associates’ 2010 Enforcement Agency Updates: Wall Street Reform and Consumer Protection Act

The Dodd/Frank Wall Street Reform and Consumer Protection Act contains provisions in Section 342 that require federal agencies such as the newly formed Consumer Financial Protection Bureau, FDIC, FHFA, SEC, NCUA, and other financial regulatory agencies to each establish an Office of Minority and Women Inclusion. Each of these offices will be responsible for developing and implementing standards that help fulfill their mission to assure “to the maximum extent possible the fair inclusion” of women and minority owned businesses in programs and contracts of the agency, their fair representation in not only in the agency’s workforce, but also the workforce of the contractors and subcontractors the agency regulates. There is a provision in the law that states a “fair” employment test will apply to “financial institutions, investment banking firms, mortgage banking firms, asset management firms, brokers, dealers, financial services entities, underwriters, accountants, investment consultants, and providers of legal services.”

 The Directors of the Offices of Minority and Women Inclusion can recommend termination of contracts or refer the matter to the OFCCP if the good faith efforts of contractors or subcontractors are found inadequate in representing women and minorities in their workforce. Contractors doing business with the agencies listed above should brace for additional scrutiny during the contracts award process once the offices at each federal agency are staffed. The law also establishes a Financial Stability Oversight Council, which will have the ability to require nonbank financial companies that pose a risk to the financial stability of the United States, to submit to supervision by the Federal Reserve. The Council also has the power to (as a last resort) break up large, complex companies that potentially pose a grave threat to the financial stability of the United States. The implications of this provision are unclear at this time, but will emerge in the future if any of these companies are also covered by the Offices of Minority & Women Inclusion.

For more information contact Berkshire Associates at 800.882.8904 or email bai@berkshireassociates.com.