Federal Reserve Board: H.2 Release for Week Ending November 21, 2015; A Brief Comment on Diversity Practices of the Board

The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending November 21, 2015, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Bank Holding Companies Community Bank System, Inc., DeWitt, New York — to acquire Oneida Financial Corp., Oneida, and thereby indirectly acquire Oneida Savings Bank and State Bank of Chittenango, Chittenango.

-Approved, November 17, 2015











Monetary and Financial Policy Term Deposit Facility — floating-rate offering of seven-day term deposits with an early withdrawal feature, same-day settlement, and a maximum tender amount of $5 billion on December 3, 2015.

-Announced, November 19, 2015



Regulations and Policies Liquidity Coverage Ratio (LCR) — publication for comment of a proposed rule to implement public disclosure requirements for depository institution holding companies and nonbank financial companies subject to the LCR requirements, and extension of compliance period for companies newly subject to the modified LCR rule.

-Approved, November 13, 2015




Enforcement BNP Paribas S.A. (BNP), Paris, France — request to select K2 Intelligence as an independent consultant to perform certain requirements under the June 30, 2014, enforcement action against BNP.

-Approved, November 20, 2015


Independent Foreclosure Review Payment Agreement — redistribution plan for unclaimed funds under the agreement to eligible borrowers who have cashed or deposited checks.

-Approved, November 18, 2015


Jones Bancshares, L.P., Waycross, Georgia, and PrimeSouth Bancshares, Inc. — written agreement issued July 12, 2011, terminated November 13, 2015.

-Announced, November 19, 2015


Regent Bancorp, Inc., Davie, Florida — written agreement issued April 25, 2011, terminated November 10, 2015.

-Announced, November 19, 2015





Separately, the Board publishes a confounding table for its EEO-1 report and purports to be an inclusive and diverse workforce. However, the results of the report by Representative Maxine Waters (D-Calif.) (Waters report) and of the Board’s own Inspector General, shows that the current Board practices have exclusive and non-diverse outcomes.

[Regarding the Board’s EEO-1 report–such a confusing list of numbers and percentages. If monetary policy was conducted in such a cavalier and obscure fashion (as it does for diversity and inclusion programs), the Board would be asked to resign.]

The present director of the Board’s Office of Minority and Women Inclusion, Sheila Clark, has evidenced that the Board itself has a self-perception that it is separate from the country in civil rights matters, for example, in the hiring black employees, and the retention those few black persons that are hired. [The Waters report (page 12) showed that across all of the federal financial regulatory agencies, including the Board, blacks received lower ratings.] The Board’s Chief Operating Officer, Don Hammond, is yet another huge obstacle to progress.


Sheila Clark’s letter to the Equal Employment Opportunity Commission (printed in the Auerbach book, page 123).


The Board’s separate but equal worldview is totally unacceptable in 2015; change is absolutely necessary–not simply diversity scorecards (???), an extremely facile and passive response (considering the Board’s 18+ year legal fight in Artis v. Greenspan, an employment discrimination case). The Board should also update its equal employment opportunity regulations to ensure that current-day employment discrimination rules are reflected in those regulations.



Federal Reserve Board: H.2 Release for Week Ending November 14, 2015

The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending November 14, 2015, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Bank Holding Companies Baylake Corp., Sturgeon Bay, Wisconsin, and Baylake Bank — to merge with NEW Bancshares, Inc., Kewaunee, and thereby indirectly acquire its subsidiary bank, Union State Bank; and for Baylake Bank to merge with Union State Bank, Kewaunee, and thereby establish branches.

-Approved, November 11, 2015


Bank Mergers Farmers Bank of Northern Missouri, Unionville, Missouri — to merge with Flowers National Bank, Cainsville, and thereby establish branches.

-Approved, November 11, 2015


Banks, Nonmember, and Miscellaneous Institutions CLS Bank International, New York, New York — to add the Hungarian forint as a settlement-eligible currency.

-Approved, November 8, 2015



Forms Forms — final Board review to extend with revision the Complex Institution Liquidity Monitoring Report (FR 2052a) and Liquidity Monitoring Report (FR 2052b).

-Approved, November 11, 2015



Forms — initial Board review to extend with revision the Federal Reserve Payments Study, including the Depository and Financial Institutions Payments Survey (FR 3066a); Networks, Processors, and Issuers Payments Surveys (FR 3066b); Check Sample Survey (FR 3066c); and Retail Payments Survey Supplement (FR 3066d).

-Proposed, November 14, 2015



Regulations and Policies Financial Market Infrastructures — publication for comment of proposed changes to the Federal Reserve’s supervisory rating system for financial market infrastructures subject to Federal Reserve supervision.

-Approved, November 2, 2015



Savings and Loan Holding Companies SFSB, Inc., Bel Air, Maryland — dissolution plan, waiver of notice requirement for shareholder meeting, and bylaw amendment.

-Approved, November 13, 2015



Enforcement Credit Suisse AG, Zurich, Switzerland — denial of request by Roger Schaerer, an institution-affiliated party, to withdraw a notice of prohibition issued against him.

-Announced, November 10, 2015


East West Bank, Pasadena, California — written agreement with the Federal Reserve Bank of San Francisco.

-Announced, November 12, 2015


The Bank of Nova Scotia, Toronto, Canada, and Bank of Nova Scotia New York Agency, New York, New York — written agreement with the Federal Reserve Bank of New York and the New York State Department of Financial Services.

-Announced, November 10, 2015


WMATA: Paul J. Wiedefeld Appointed to be Next General Manager/Chief Exec.; Will Start 30-Nov.-15.

The Washington Metropolitan Area Area Transit Authority (or Metro) has appointed (by unanimous vote of the Board) Paul J. Wiedefeld to be its next General Manager/Chief Executive Officer. Mr. Wiedefeld’s salary will be $397, 500 (plus benefits), and he will start on November 30, 2015.

Mr. Wiedefeld has a four-year-term contract.

Federal Reserve Board: H.2 Release for Week Ending November 7, 2015; Background on the Board’s OMWI Program

The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending November 7, 2015, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Testimony and Statements Supervision and Regulation — statement by Chair Yellen before the House Committee on Financial Services on the Federal Reserve’s regulation and supervision of financial institutions.

-Published, November 4, 2015

Bank Holding Companies M&T Bank Corporation, Buffalo, New York — commenter’s request for reconsideration of the Board’s approval of the proposal by M&T Bank Corporation to acquire Hudson City Bancorp, Inc., Paramus, New Jersey.

-Denied, November 4, 2015

Forms Forms — final Board review to extend without revision the recordkeeping and disclosure requirements associated with the regulations implementing the Fair Credit Reporting Act (Regulation V).

-Approved, November 2, 2015

Forms — initial Board review to implement the Application for Membership for the Community Advisory Council (FR 1401).

-Proposed, November 2, 2015

Reserve Bank Operations Federal Reserve Bank of Minneapolis — appointment of Neel T. Kashkari as president, effective January 1, 2016.

-Approved, October 22, 2015


Reserve Bank Services Federal Reserve Priced Services — 2016 private sector adjustment factor and fee schedules for priced services and electronic access.

-Approved, November 2, 2015

Enforcement Deutsche Bank, AG, Frankfurt, Germany — issuance of a consent cease and desist order and assessment of a civil money penalty.

-Approved, November 2, 2015

Goldman, Sachs & Co., New York, New York — issuance of a consent order of prohibition against Rohit Bansal, a former institution-affiliated party.

-Announced, November 5, 2015

Separately, last week, Representative Maxine Waters (D-Calif.) and other Congressional Democrats issued a report (Waters Report) about diversity within the federal financial regulatory agencies. The executive summary for the report indicated that the Board’s director for the Office of Minority and Women Inclusion (at the time of this writing, the Board calls the office, the Office of Diversity and Inclusion (or ODI)) is Ms. Sheila Clark.

[Quote from Rev. Thomas Merton’ s book, “Seeds of Destruction.” (Pope Francis mentioned Rev. Merton during his remarks before a joint session of Congress.)–

But the [civil rights] laws have been framed in a way that in every case their execution has depended on the good will of white society, and the white man has not failed, when left to himself, to block, obstruct, or simply forget the necessary action without which the rights of the Negro cannot be engaged in fact. (Page 19).


Some pertinent background facts:

January 11, 2011: Artis v Greenspan–The Court of Appeals for the District of Columbia Circuit, issued a decision against the Board, remanding the case to the U.S. District Court for the District of Columbia.

January 11, 2011: The Board announced that it had created offices of diversity and inclusion for the Board and the Federal Reserve Banks. The director of the Board’s office was named–Ms. Sheila Clark.

Ms. Sheila Clark–

  • See a Huffington Post article by Professor Robert D. Auerbach, author of “Deception and Abuse at the Fed: Henry B. Gonzalez Battles Alan Greenspan’s Bank,” in which he stated (reference (about letter) is located at page 123 of his book)–
    • “The Fed Press Release states that Sheila Clark will be one of the heads of the “diversity and inclusion offices” at the Board. I have a copy of a letter sent by her (10/27/1995) stating that “while the Board of Governors of the Federal Reserve System has taken the position that [missing ‘it”] is not subject to the [C]ivil [R]ights Act of 1964, as amended, and its associated executive orders and regulations, it subscribes fully to their basic goals and spirit.” Yet, the Federal government’s Equal Employment Opportunity Commission (EEOC) had told Greenspan emphatically as early as 1989 that the Commission’s position was that Title VII of the Civil Rights Act applied fully to the Federal Reserve.”
Sheila Clark's letter to the EEOC (printed in the Aurebach book, page 123).
Sheila Clark’s letter to the EEOC (printed in the Auerbach book, page 123).

In addition, the executive summary of the Waters Report (page 5) stated the following about the Board:

The Federal Reserve Board of Governors (“FRB”)

OMWI Director–Sheila Clark

The Federal Reserve Board is the central bank of the United States, and in addition to working to provide a safer, more stable and flexible monetary system, it also regulates bank holding companies, and the largest, most complex non-bank financial institutions in the country.

In racial, ethnic and gender categories, its workforce diversity was found to exceed the diversity found within the civilian labor force.

The FRB has the most diverse general workforce and the largest percentage of women employees in senior management.

Yet, notably the FRB OIG determined that the diversity data collected was not validated against the agency’s employee electronic human resources records which undermines the integrity of the agency’s diversity efforts and its strong empirical diversity data.

The FRB does not have a finalized set of diversity and inclusion standards as required under the Dodd-Frank Act.

Federal Reserve Board, Office of Minority and Women Inclusion, Reports to Congress

(Preface language for report submitted in 2015.) “Pursuant to section 342(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the Office of Diversity and Inclusion (ODI) of the Board of Governors of the Federal Reserve System must submit an annual report to the Congress outlining the activities, successes, and challenges of the office. This is the office’s report for calendar year 2014. Sheila Clark serves as the director of ODI.”

Federal Reserve Board: H.2 Release for Week Ending October 31, 2015; Rep. Maxine Waters Issues Report on Diversity at Fed. Financial Agencies, Incl. the Board

The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending October 31, 2015, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Regulations and Policies Margin and Capital Requirements for Covered Swap Entities — (1) interagency final rule to establish minimum margin and capital requirements for swaps and security-based swaps that are not cleared through a clearinghouse, in accordance with the Dodd-Frank Act, and (2) request for comment on interim final rule to exempt from margin requirements certain non-cleared swaps, such as those used for hedging purposes by commercial end-user counterparties.

-Approved, October 30, 2015

Regulations Q and YY — publication for comment of proposed rule to require U.S. global systemically important banking organizations and the U.S. operations of systemically important foreign banks to meet a new long-term debt requirement and a new total loss-absorbing capacity requirement.

-Approved, October 30, 2015

In addition, on November 5, 2015, the Board permanently barred Mr. Rohit Bansal, former investment banker at Goldman Sachs & Co. from participating in the banking industry.


Separately, and also on November 5, 2015, Representative Maxine Waters (D-Calif.), Ranking Member of the House Committee on Financial Services, and the Tri-Caucus, issued a report, “The Dodd-Frank Act Five Years Later: Diversity in the Financial Services Agencies.” In addition, the Committee Democrats issued a letter, with the report, to the agency heads, requesting a response by December 7, 2015.

Notably, but sadly unsurprisingly, the report found that across the federal financial agencies, black/African American employees, overall, received lower performance management scores than white employees (see graphs on page 12 of the report, especially the one for the Board at the bottom of the page).

In addition, the report had specific comments for each agency. I will quote the portion of the report relating to the Board below.

The Federal Reserve Board of Governors (FRB)

Empirically, the FRB workforce was among the most diverse of all the Agencies, both generally and with respect to the senior management. In racial, ethnic, and gender categories, its workforce diversity was found to exceed the CLF. However, the OIG found several areas where the FRB has failed to adhere to statutory requirements.

Procedurally, the FRB did not follow the statutory instructions to name the newly-established diversity office, “the Office of Minority and Women Inclusion,” and instead opted to call it the “Office of Diversity and Inclusion” (“OD&I”).

Substantively, the OIG also recommended that the OD&I Director ensure that No-FEAR Act training is offered on a regular basis, is tailored to the FRB, and includes EEO and diversity and inclusion topics in accordance with the Board’s No-FEAR Act Written Training Plan.[48. Federal Reserve Board, Office of Inspector General, THE BOARD CAN ENHANCE ITS DIVERSITY AND INCLUSION EFFORTS, (2015-MO-B006, Mar. 31, 2015), 54.] Further, the OIG suggested that such trainings be updated as necessary to address any deficiencies identified, and that attendance records be retained.[49. Id.] The OIG noted that the EEOC’s MD-715 “guidance advocates that all employees receive information about the EEO program through training on the EEO process and the protections afforded to employees, related policy statements, and reasonable accommodation procedures.”[50. Id. at 53.] Such diversity and inclusion training is critical to the proper functioning of the human resources office within the agency. Notably, the OIG found that the “data collected [for the OD&I’s MD-715 processes] were not validated against the employee electronic records stored in HR” during the audit period from FY 2011 through FY 2013. The lack of controls for diversity data found at the FRB by the OIG undermines the integrity of the agency’s diversity and inclusion programs, and may in fact be contrary to required EEOC reporting regulations.

Ultimately, the FRB’s implementation of the Section 342 requirements suggests to the Committee staff a tendency toward maintaining the status-quo with respect to workforce diversity efforts. “Although the FRB established the OD&I to include an OMWI function in response to the Dodd-Frank Act requirements, according to the OD&I official, the OD&I has not significantly modified its approach because these activities were already being covered prior to the enactment of the Dodd-Frank Act.”[51. Id. at 55.] Also, like several other agencies, as of the date of the OIG’s report, the OD&I had not finalized a formal set of diversity and inclusion standards, as required by Section 342.

[Author’s note: This blog covered some parts of these audit reports from the Inspectors General, especially that for the Board.]

Federal Financial Agency Report Number Internet Link Comment
Consumer Financial Protection Bureau Audit report 2015-MO-C-002 http://oig.federalreserve.gov/reports/cfpb-diversity-inclusion-mar2015.pdf American Banker article about racial disparities of CFPB staff evaluations.
Department of the Treasury, Office of the Comptroller of the Currency OIG-15-017 http://www.treasury.gov/about/organizational-structure/ig/Audit%20Reports%20and%20Testimonies/OIG-15-017.pdf
Federal Deposit Insurance Corporation Eval-15-001 http://www.fdicoig.gov/reports15/15-001EV.pdf
Federal Housing Finance Agency EVL-2015-003 http://fhfaoig.gov/Content/Files/EVL-2015-003.pdf
Federal Reserve Board Audit report 2015-MO-B-006 http://oig.federalreserve.gov/reports/board-diversity-inclusion-mar2015.pdf What is left out of the report is significant: Artis v. Bernanke (now Yellen). Also 12 U.S.C. 244 needs Congressional attention to ensure that Title 5 of the U.S. Code applies to the Board; the Board’s record-keeping on, and reporting of, its internal management is lax.
National Credit Union Administration OIG-14-09 http://www.ncua.gov/about/Leadership/CO/OIG/Documents/OIG201409EqualOpportunityDiversity.pdf Click for blog post on this report
Securities and Exchange Commission 528 http://www.sec.gov/oig/reportspubs/528.pdf Report is thorough, thoughtful, and well done.

Federal Reserve Board: H.2 Release for Week Ending October 24, 2015; Board’s IG Identifies Major Management Challenges


The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending October 24, 2015, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Financial Holding Companies The Desjardins Group, Levis, Canada; Federation des caisses Desjardins du Quebec; Caisee central Desjardins du Quebec, Montreal; and Desjardins FSB Holdings, Inc., Hallandale, Florida — elections to become financial holding companies.
-Effective, October 22, 2015

Separately, the Board’s Office of Inspector General (OIG) has issued on September 30, 2015, a document titled “Major Management Challenges for the Board of Governors of the Federal Reserve System.”

In Management Challenge #4, the OIG identified the following item: “Building and Sustaining a High-Performing and Diverse Workforce.” (The item references the OIG’s audit report, covered previously in this blog). I will quote the text below.

Artist: michael sloan
Artist: michael sloan

Management Challenge 4: Building and Sustaining a High-Performing and Diverse Workforce

The Board’s success in achieving its mission depends on attracting, retaining, and developing a qualified, diverse, and agile workforce. Continually evolving workforce expectations and the highly competitive hiring environment for staff with the specialized skills that the Board needs create challenges for the Board. A key step in ensuring that the Board has a diverse workforce that can effectively carry out the Board’s mission is identifying the necessary technical, managerial, and leadership skills through workforce and succession planning. In addition, the Board must continue to support its new performance management process, which is intended to provide greater accountability for organizational objectives and to support employee development.

Recruiting, Engaging, and Retaining a Highly Skilled, Diverse Workforce

The Board faces challenges in recruiting and retaining a highly skilled, diverse workforce due to several factors. The Board must recruit in a competitive hiring environment for individuals with skills in science, technology, engineering, and math. In addition, to retain the highly skilled workforce it needs, the Board must successfully address evolving expectations regarding diversity, workplace flexibility, career progression, communication, and continuous learning.

To better engage its current workforce, the Board administered an employee engagement survey in 2014. To address the survey results, the Board has undertaken initiatives both Boardwide and at the division level to further explore and address staff members’ concerns, such as career development and communication. The Board will need to address these concerns to achieve its goal of being a sought-after place to work that attracts highly qualified individuals and embraces the characteristics that each individual brings to the workplace. Effectively employing the unique skills, knowledge, and experiences of the Board’s staff members is critical to supporting the innovative thinking that is needed to address the ever-changing environment in which the Board operates.

An important consideration for the Board in recruiting and retaining staff is engaging in workforce planning. The Board will need to determine the required skill sets and number of staff to enable each division to effectively and efficiently accomplish its goals. In addition, the Board will need to address any skill gaps and align resources to support emerging programs central to the Board’s mission. A key part of workforce planning is developing a succession plan to ensure continuity of knowledge and leadership in key positions. Failure to plan for and anticipate turnover and departures could have a negative effect on the Board’s ability to achieve its goals and fulfill its mission.

The Board has taken steps to enhance its diversity and inclusion practices; however, our recent audit work identified some improvement opportunities. The Board recognizes that although the representation of minorities among those in line to move into official staff roles has been increasing, it remains low. The Board stated that it has begun to implement processes to track senior-staff position applicant data to be able to better measure trends in diversity. As the Board continues to build and sustain a high-performing and diverse workforce, fostering diversity and inclusion and increasing the representation of minorities among those in line for official staff roles should continue to be areas of focus.

  Implementing a New Performance Management System

In 2015, the Board implemented a new performance management system organization-wide following a 2014 pilot program. This new program is intended to strengthen the alignment of expectations for staff members with Board and division strategic goals and responsibilities, provide greater accountability, and support employee development. The new program seeks to be a more forward-looking, development-centric process in which staff members and managers work together for the greater effectiveness of the Board. The Board will be challenged to ensure (1) that the new process is effective, fair, and not overly burdensome and (2) that a consistent approach is followed across the agency. Additionally, the Board’s plan to automate the forms for the new performance management system will present further challenges to this new process.

Agency Actions 

The Board’s first engagement survey was administered in September 2014. The survey was intended to help the Board foster an environment that engages employees in the Board’s mission and encourages them to contribute to a positive work environment. Some issues identified by the survey are being addressed at the Board level. In addition, Board divisions have created working groups to address the results of the survey; these efforts are ongoing.

The Board’s Organizational Development and Learning section is administering a two phase, formal agency-wide succession planning program, which began in late 2012, to help identify a diverse pool of candidates for senior management positions throughout the Board. The Board’s program will identify development opportunities for employees to prepare them for potential advancement. Both phases are scheduled for full implementation by 2017.

Additionally, the Board continues to develop its Leading and Managing People program, which draws on the expertise of leaders from around the Board to help all Board managers and supervisors develop their skills and strengthen their capacity to identify, coach, and support the future leaders of the organization.

The Board stated that it is finalizing a diversity and inclusion strategic plan and rolling out a new diversity and inclusion scorecard to all Board divisions. Beginning in 2016, the annual scorecards will be assessed by the Office of Minority and Women Inclusion and compiled into one report that will be reviewed by the Board’s Chair. The Board also plans to formalize the standards that the Office of Diversity and Inclusion relies on for equal employment opportunity and the racial, ethnic, and gender diversity of the workforce and the senior management of the agency, which will be included in the diversity and inclusion strategic plan.

The Board is updating its performance management policy to better reflect the new performance management system. In addition, the Board contracted for the necessary expertise to assist with the program’s implementation, which includes information sessions, tools and guides, training, and other support.