15th
Annual Edition 'Buying Power of
Black America' report breaks down billions in expenditures Black
consumers are responding to tighter economic condition by focusing more of
their spending on items and services that improve their homes and
lifestyle. That's one of the trends revealed in the 15th annual report,
"The Buying Power of Black America," published by Target Market News. The
report analyzes spending for black households in 2008 and finds that
African-Americans...
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Provision by Rep. Maxine Waters in financial reform law creates
inclusion for minorities
From
Tribune News Service (August 16, 2010) Tucked into the Wall Street reform measure was a
little-noticed provision pushing for more diversity in the
disproportionately white and male world of finance, and its potentially
far-reaching implications have set off alarm bells among conservatives
and some in the financial sector.
The provision pushes all federally regulated financial firms that do
business with the government and their subcontractors to hire more women
and minorities and also calls upon federal agencies to diversify their
own ranks.
Michael Yaki, a member of the U.S. Commission on Civil Rights, hailed it
as the most significant step the federal government has taken to create
economic opportunities for women and minorities since President Richard
Nixon was in office.
"This is a wake-up call for Wall Street: women, black Americans,
Asian-Americans, Latino-Americans, they all pay for your bailouts," Yaki
said. "Firms must take steps to be more reflective of America."
The legislation calls for the creation of an Office of Minority and
Women Inclusion at each of the federal regulatory agencies. The
directors of each of the at least 20 offices will establish standards to
ensure the "fair inclusion and utilization" of minorities and women
throughout the agency's work.
The directors will evaluate the diversity policies and practices of
entities regulated by the agencies. If a company that does business with
the government does not show that it has made a "good faith effort" to
diversify its work force, the director of the office may recommend that
the contract be terminated. The office will also annually report the
percentage of contracts the agency awarded to businesses owned by women
and minorities to Congress.
Some of the largest banks on Wall Street have formal relationships with
the government for asset management, meaning they could fall under the
legislation's broad definition of contractors, said James Ballentine,
senior vice president in government relations for the American Bankers
Association.
"This is one of the provisions that has a large question mark," he said.
"We are just uncertain as to how the regulators will interpret this
provision -- whether they see it as a mandate or simply an effort to be
made by the regulatory agencies and the banks."
In 2008, white males held 64 percent of senior positions in the
financial services industry, according to a recent study conducted by
the Government Accountability Office. The industry's diversity at the
management level did not change significantly from 1993 to 2008.
Rep. Maxine Waters, D-Calif. (pictured), who wrote the provision, said
Friday it would deal with the "historic lack of access that minority and
women individuals and institutions have had in hiring, decision-making,
contracting and procurement opportunities," in the financial services
sector.
Some conservatives and employment experts fear the provision will deal a
blow to American businesses at a time when they are vulnerable.
Diana Furchtgott-Roth, who served as chief economist at the Labor
Department under President George W. Bush and is now a senior fellow at
the Hudson Institute, said the legislation represents a sharp pivot in
employment law that should have come under greater scrutiny.
"This will destroy the financial industry," she said. "If the CEOs of
American financial institutions have to be worried about the diversity
regulations whereas those in other countries are worrying about their
profits, we are going to fall behind."
The provision applies to financial institutions, investment and mortgage
banking firms, brokers, dealers, financial services entities,
underwriters, accountants, investment consultants, asset management
firms and providers of legal services -- easily thousands of companies.
Even though the legislation states that lending will not be affected,
some conservatives in Congress remain concerned that the provision will
politicize the allocation of credit, a Republican House aide said.
Republican lawmakers and businesses alike were surprised that the
provision remained intact after the prolonged negotiation process, the
aide noted.
One industry representative who declined to speak publicly due to the
topic's sensitive nature said he worries it will be complicated for
companies that are regulated by multiple agencies -- each with their own
standards -- to comply. He is also concerned the vague language in the
legislation could permit a system of de facto quotas for hiring and
lending.
Though the legislation never mentions quotas, Todd Gaziano, one of four
members of the U.S. Commission on Civil Rights who signed a letter
objecting to the section, said it all but requires the practice of
hiring by the numbers. Without a work force that reflects population
statistics, it could be difficult for firms to convince agencies that
they have done enough to hire minorities and women, he said.
"It's pernicious, it's unconstitutional and it's counterproductive to
ending discrimination because it requires discrimination," he said. "If
you are hiring somebody because of his race, you are not hiring somebody
else from a different race."
Champions of the legislation, however, say they merely hope to see
financial firms improve from the relatively low benchmark they have set.
The regulations will likely be flexible, Yaki said, with firms based in
particularly diverse parts of the country held to a higher standard.
"There can't be a cookie-cutter approach to this. That just wouldn't
make sense," he said.
