By Benjamin Goad - 12/19/13 05:43 PM EST
Regulators said Thursday they would extend the public comment period for their contentious plan to begin tracking the number of women and minorities working on Wall Street and throughout the financial industry.
Interested partied will now have until February to weigh in on the government’s proposal to monitor diversity practices at institutions it regulates, according to six agencies working on the effort.
The 2010 Dodd-Frank financial reform law directed each of the agencies to establish an Office of Minority and Women Inclusion and tasked the directors of the offices to develop standards for assessing diversity policies.
The standards could include various factors, including an organization’s commitment to diversity, the profile of its workforce, outreach to minority and women’s groups and the diversity of its suppliers.
The findings would be publicly available, according to a draft policy statement issued in October by the Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Consumer Financial Protection Bureau and the Securities and Exchange Commission.
"The Agencies recognize that greater diversity and inclusion promotes stronger, more effective and more innovative businesses, as well as opportunities to serve a wider range of customers,” they wrote in the statement.
The financial reform law makes clear, however, that neither banks nor other regulated entities would be required to take any action based on the results of the assessments.
Nothing in the statute “may be construed to mandate any requirement on or otherwise affect the lending policies and practices of any regulated entity, or to require any specific action based on the findings of the assessment,” it reads.
Still, critics say the policy would promote quotas and that it raises serious constitutional questions.
“The likelihood that it will in fact promote discrimination is overwhelming,” four members of the U.S. Commission on Civil Rights said last month in a letter to regulators.
“Banks and the other regulated entities will be caught in a double bind. On the one hand, their regulators in the Agencies will monitor their diversity efforts in hiring and contracting based on ‘metrics’ and ‘percentages,’ i.e., based on numerical quotas,” they wrote. “On the other hand, federal civil rights law prevents these financial institutions from making, hiring or contracting decisions based on race, ethnicity or sex.”
Under the guidance issued in October, the public had until Tuesday to comment on the proposed initiative. The extension gives interested parties until Feb. 7 to submit comments.
"The Agencies believe that the additional time will facilitate public comment on the policy statement and the questions posed by the Agencies," the statement issued Thursday said.