Chicago, IL, January 23, 2014 --(PR.com
)-- The following is NAMWOLF's Commentary on the "Policy Statement Establishing Joint Standards for Assessing the Diversity Policies & Practices of Entities Regulated by the Agencies":
"The 'Policy Statement Establishing Joint Standards for Assessing the Diversity Policies & Practices of Entities Regulated by the Agencies' was published in the Federal Register on October 23, 2013. NAMWOLF supplies this comment to make clear that their opinion is that the Policy Statement falls short by failing to mandate the fair inclusion and utilization of minority and women-owned business, by failing to provide a definition of their 'fair inclusion,' and by failing to require metrics to measure the same, transparency, and accountability.
"The stated goal of mandating that each agency not only establish an 'Office of Women & Minority Inclusion' but also ensure that there is 'fair inclusion and utilization' of such minority and women businesses is commendable, but unfortunately, the Policy Statement is flawed. It does not do enough to ensure the 'fair inclusion' of minority and women owned firms. The Policy Statement, published almost three years after the enactment of the Dodd-Frank Act, does little to ensure the utilization of minority and women-owned businesses. The standards set forth in the Policy Statement are weak.
"None of the agencies have put into place quantifiable requirements to ensure the full and fair inclusion of women and minority-owned businesses in the financial industry. The proposed joint standards are therefore far from effective in promoting diversity and inclusion.
"This comment will address the issues and weaknesses of the standards concerning supplier diversity.
"a. Procurement & Business Practices –Supplier Diversity
"The standards speak to diversifying the procurement process and increasing supplier diversity within the regulated entities. The agencies set forth three distinct standards that they believe will be essential to attaining diversity within the procurement process. While the attempt is laudable, the standards will be ineffective in attaining the desired outcome. The standards are as follows:
"1. Requiring The Regulated Entities To Have A 'Supplier Diversity' Policy That Provides A 'Fair Opportunity' For Minority And Women-Owned Businesses To Compete.
"Most private companies and public agencies have some sort of supplier diversity policy. However, the agencies have yet to define what is in fact a 'fair opportunity' and 'fair inclusion' for minority and women-owned businesses. Under the standards, entities may continue to utilize their age-old supplier diversity policy and continue to make no progress. The agencies should provide clear guidelines to the entities as to what 'fair inclusion' means.
"The agencies should define a 'fair' percentage spend on minority and women-owned businesses. NAMWOLF has and recommends that its position be adopted, i.e., that:
"A 'fair' percentage spend on minority and women-owned businesses be at least 10%. In other words, the OWMIs should define Section 342 to require each agency to spend at least 10% of its contracting dollars on minority-owned businesses, and at least 10% of its contracting dollars on women-owned businesses.
"'The National Association of Minority and Women Owned Law Firms Urges The Offices of Minority and Women Inclusion to Seize Section 342, and Act,' The Wall Street Journal (Sheryl L. Axelrod, Apr. 22, 2013).
"2. Regulated Entities Have Methods To Evaluate And Assess Supplier Diversity That May Include Metrics And Analytics Related To Spending And The Percentage Spent With Minority And Women-Owned Businesses
"Although the agencies are allowing the regulated entities to use metrics to support their supplier diversity programs, there is no requirement they do so. It’s encouraged, but purely optional which again is why it falls short.
"This is not to suggest that all agencies have failed in ensuring the inclusion of women and minorities. One agency that has exceeded the 10% spend proposed by NAMWOLF is the FDIC.
"In 2013, the FDIC paid $140.6 million of its total contract payments (25.4%) to minority and women-owned businesses. Minority-owned firms were paid $102.9 million, accounting for 18.6% of the total dollars paid to contractors. Women-owned firms were paid $63.7 million, accounting for 11.5% of the total dollars paid to contractors in 2013. Agencies should consider exploring and, if possible, adopting the practices of the FDIC so that they to can achieve similar success but either way, the metrics should be a mandatory part of the standards rather than a voluntary provision that might (or might not) be followed.
"3. Regulated Entities Have Practices To Promote A Diverse Supplier Pool.
"The agencies are recommending that the regulated entities conduct outreach to diverse suppliers using a variety of channels. However, they are not requiring that the regulated entities engage in such outreach. They should.
"It is often not a lack of information that precludes minorities and women-owned businesses from applying for the contracting opportunities, but the inability of the minority and women-owned businesses to have a level playing field within which to compete for the work.
"b. Practices to Promote Transparency of Organizational Diversity & Inclusion
"These standards purport to promote transparency between the agencies and public at large. However, the agencies did not require the use of any metrics. There is no requirement that the agencies or their regulated entities show how much they spend on minority and women-owned businesses, or what contracts have been awarded to the minority and women-owned businesses. If agencies are to heed to these so-called standards, they must be required to disclose these numbers publicly and be held accountable at least to the public for any failure to achieve their stated goals.
"While the agencies are taking steps to set forth governing standards, the standards do not go far enough to have an impact on the agencies or regulated entities’ practices. If the agencies are truly committed to making an impact and ensuring inclusion, they must develop concrete and measurable standards. A method of holding the agencies who fail to implement such standards accountable also needs to be built in.
"Without the changes suggested above, the goal of ensuring 'fair inclusion and utilization' of minority and women-owned businesses will not be fully realized."
About NAMWOLF: The National Association of Minority & Women Owned Law Firms (NAMWOLF), founded in 2001, is a nonprofit trade association comprised of minority and women-owned law firms and other interested parties throughout the United States. NAMWOLF’S Mission is to promote diversity in the legal profession by fostering successful relationships among preeminent minority and women-owned law firms and private/public entities. Our Vision is to achieve equity in legal opportunity through minority and women-owned Law Firms. We advocate for all minority and women-owned firms, and we have a membership of 115 Law firms across 33 States. NAMWOLF has over 140 major corporations and public entities that have signed a commitment to spend at least 5% of their outside legal dollars with minority and women owned law firms. This article was Authored by Shahzad Q. Qadri Esq., a Partner at Wong Fleming law firm and Chair NAMWOLF Dodd-Frank Ad Hoc Committee, an Ad Hoc committee under NAMWOLF Advocacy Committee, Sheryl Axelrod and Jerry Gonzalez Co-Chairs, Lynn Luker, NAMWOLF Board Chairperson.
 It must be noted that when that when this comment is refers to “Agencies” it is talking about the six federal agencies: OCC; Board; FDIC; NCUA; CFPB & SEC; when referring to entities the comment is addressing to the financial institutions that are regulated by these agencies.