Futility of “Colorblindness”: Red Cross Poster Associated Negative Connotations to Nonwhite Characters; Mere “Apology” Insufficient

The Washington Post reported on the following story. A user of a pool looked at an American Red Cross poster and felt uncomfortable because the characters that displayed the so-called uncool pool behaviors were generally nonwhite. The posters were created by the American Red Cross and distributed. Seemingly, throughout the process, no one noticed this particular issue.

American Red Cross former pool safety poster; photo of poster taken by Margaret Sawyer

The response from the Red Cross was unsurprising, denying racial “intent” and promising to correct the situation. However, the situation is not overt discrimination but the formation of mental negative connotations and then representing those negative ideas with nonwhite characters or people.

A quote from Reverend Thomas Merton’s book, “Seeds of Destruction” (Letters to a White Liberal), page 19-20, demonstrates the weakness of reliance on claims of lack of “intent”:

We have been willing to grant the Negro rights on paper, even in the South. But the laws have been framed in such 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 enjoyed in fact. Hence, when laws have been passed, then contested, dragged through all of the courts, and finally upheld, the Negro is still in no position to benefit by them without, in each case, entering into further interminable lawsuits every time he wants to exercise a right guaranteed to him by law.

(Note: Emphasis, above (in bold), the blog author’s.)

A mere “apology” is insufficient to address this issue. The negative associations in the poster (and elsewhere in the culture of the United States) will have to be unearthed, raised to the sunlight, examined, and dealt with totally. As seen with Antonin Scalia (1936-2016), the United States’ cultural practices need much attention and correction in order to be truly inclusive of all people.

The work of Jane Elliott is a good start to begin the inquiry.

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Federal Reserve Board: H.2 Release for Week Ending March 12, 2016; Dems Request Update to 2013 GAO Study on Diversity in Financial Services Agencies and Industry

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 March 12, 2016, is below.

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

Category Action Taken
Forms Forms — initial Board review to extend without revision the Funding and Liquidity Risk Management Guidance (FR 4198) and Recordkeeping Provisions Associated with Guidance on Leveraged Lending (FR 4203).

-Proposed, March 9, 2016

 

Forms — initial Board review to extend without revision the Reporting, Recordkeeping, and Disclosure Requirements Associated with Regulation NN (Reg NN).

-Proposed, March 10, 2016

 

 

 

 

 

Personnel Division of Banking Supervision and Regulation — appointment of Steve Spurry, Kathleen Johnson, and Joanne Wakim as assistant directors.

-Announced, March 7, 2016

Management Division — appointment of Steven A. Miranda as deputy director.

-Announced, March 9, 2016

 

Enforcement American Bank of Baxter Springs, Baxter Springs, Kansas — written agreement dated January 5, 2010, terminated March 4, 2016.

-Announced, March 8, 2016

 

CB Financial Corporation, Wilson, North Carolina — written agreement dated May 25, 2010, terminated March 3, 2016.

-Announced, March 8, 2016

 

Hazard Bancorp, Hazard, Kentucky, and Peoples Bank and Trust Company of Hazard — written agreement with the Federal Reserve Bank of Cleveland and the Commonwealth of Kentucky Department of Financial Institutions.

-Announced, March 8, 2016

 

 

 

Congressional Democrats Request Update to General Accountability Office’s 2013 Report on Diversity within the Financial Services Industry and Related Federal Agencies

On March 15, 2016, Ranking Member of the House Financial Services Committee, Rep. Maxine Waters (D-Calif.), Ranking Member of the Senate Banking Committee, Sen. Sherrod Brown (D-Ohio), and Ranking Member of the Investigations subcommittee of the House Financial Services Committee, Rep. Al Green (D-Tx.) requested that the General Accountability Office update its 2013 report “Diversity Management: Trends and Practices in the Financial Services Industry and Agencies after the Recent Financial Crisis” (released on May 16, 2013).

The Democrats stated that they were concerned about the slow pace of increasing diversity in the financial sector, as such diversity will help the industry to understand better all of the communities that it serves and to ensure that all consumers are treated fairly.

See also a report from the staff of the House Financial Services Committee (discussed previously in this blog).

 

Federal Financial Regulatory Agencies: Financial Services Democrats Receive Responses from Agencies; Seek Further Action and Commitment for Measurable Results

In a previous post, I discussed the publication of a report by the U.S. House of Representatives’ Democrats (Representative Maxine Waters (D-Calif.), Representative Al Green (D-Tx.), and members of the Tri-Caucus) on the diversity and inclusion issues within the federal financial agencies.

Agency Date submitted Link Comment
Consumer Financial Protection Bureau December 7, 2015 http://democrats.financialservices.house.gov/uploadedfiles/2015.18.25_diversity_report_and_reforms_agency_responses_final.pdf
Federal Deposit Insurance Corporation December 7, 2015
Federal Housing Finance Agency December 7, 2015
Federal Reserve Board November 25, 2015 and February 8, 2016 Detailed letter (Feb. 8, 2016) submitted 2 days before the Monetary Policy Report hearing (Feb. 10, 2016).
National Credit Union Administration December 7, 2015
Office of the Comptroller of the Currency December 8, 2015
Securities and Exchange Commission December 9, 2015

According to a press release issued on January 8, 2016, the Democrats received responses from the federal financial regulatory agencies. Waters and members of the Tri-Caucus appreciated the responses but seek further action to ensure demonstrated commitment and action on the part of these agencies.

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.

In particular, Chair Janet Yellen stated in the Fed’s letter that the Fed had already begun acting on recommendations from its Inspector General.

[Note: Key issues to monitor PMR monitoring, discussions with OMWI director. Responses to these recommendations were opaque.]

Author’s note: Other posts relating to the Federal Reserve Board on this issue follow.

https://alexwdc.wordpress.com/2015/11/27/federal-reserve-board-h-2-release-for-week-ending-november-21-2015-a-brief-comment-on-diversity-practices-of-the-board/

https://alexwdc.wordpress.com/2015/11/13/federal-reserve-board-h-2-release-for-week-ending-november-7-2015-background-on-the-boards-omwi-program/

https://alexwdc.wordpress.com/2015/12/11/federal-reserve-board-walter-t-charlton-counsel-for-cynthia-artis-artis-v-bernanke-on-c-span-in-2002-a-note-onjohn-roberts-and-antonin-scalia/

https://alexwdc.wordpress.com/2015/10/29/federal-reserve-board-h-2-release-for-week-ending-october-24-2015-boards-ig-identifies-major-management-challenges/

https://alexwdc.wordpress.com/2015/07/22/federal-reserve-board-long-running-employment-discrimination-case-artis-v-bernanke-yellen-dismissed-with-prejudice-length-of-case-offends-conscience/

https://alexwdc.wordpress.com/2016/02/11/federal-reserve-board-legal-cases-against-the-board-2/

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

(A/C)

 

 

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 of 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.

 

2014-03-04-auerbach
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.

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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

[Update 8-March-16: Representative Maxine Waters (D-Calif.) and the Tri-Caucus issued a press release (dated 8-Jan-16) discussing the receipt of letters from the federal financial regulatory agencies.]

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.

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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.

Diversity and Inclusion: Congressional Democrats Deeply Disappointed with Federal Financial Regulatory Agencies Joint Statement; Statement Said to be Ambiguous, Opaque, and Weak

Two Democratic members of the Committee on Financial Services in the House of Representatives (Committee) issued a press release expressing concerns with a joint statement authored by the federal financial regulatory agencies.

According to the press release, Representative Maxine Waters (D-Calif.), ranking member of the Committee and chief architect of section 342 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), P.L. 111-203, and Representative Joyce Beatty (D-Ohio), who oversees the implementation of section 342 of Dodd-Frank, stated that they were deeply disappointed with the structure and scope of the joint statement.

The reasons for the disappointment, as presented in the press release and based on a 2014 letter from the Congressional Black Caucus to participating federal agencies, are as follows:

  • The failure of the joint standards to bring transparency to the financial services industry, which, the authors stated, has a long history of failing to promote diversity in its workforce.
  • The final statement is said to be ambiguous and “does not establish uniform criteria to assess workforce and supplier diversity practices.
  • The final statement does not require all regulated entities to collect and report data on workforce and supplier diversity practices. (The press release explains that section 342 of Dodd-Frank provided authority for required data collection.)

Diversity and Inclusion: Federal Financial Regulatory Agencies Issue Final Statement on Assessment of Diversity & Inclusion Practices at Regulated Entities

On June 10, 2015, the federal financial agencies issued a final inter-agency policy statement establishing joint standards for assessing the diversity practices and practices regulated by the agencies. See 80 Fed. Reg. 33016 (June 10, 2015), effective on the date of publication (the agencies are soliciting comments on the collection of information). These standards were established by section 324 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (12 U.S.C. section 5452).

The federal financial agencies are the following–the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Bureau of Consumer Financial Protection, and the Securities and Exchange Commission. Congressional Democrats requested that these agencies submit internal agency assessments of diversity and inclusion.

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.

Because several of the financial agencies have spotty records in diversity and inclusion, it is curious to see this final statement being published for the financial services industry, which may have similar problems. Nevertheless, it is important to have the standards published and the information recorded and published for public review. Oversight of the data that are submitted is essential, given the results from the federal financial regulatory agencies. [For example, it is interesting to see the resistance to diversity and inclusion data collection by the Board’s response through Don Hammond, chief operating officer for the Board. The Board’s history on diversity and inclusion gives an observer pause, and improvement of the Board’s compliance on these issues is expected and necessary.]

In reading the preamble of the final statement, some commentators stated that the then-proposed standards amounted to “quotas” or an additional compliance burden. However, without the data being collected, there are structural problems facing minorities and women in the financial services industry as well in other areas of the society in the United States.

Without these persistent issues, these commentators would have a point. But since the issues still exist in society, within the financial services sector (with existing practices before June 10, 2015), and especially within the federal financial regulatory agencies, data are needed for study. The mere collection and publication of data imposes no requirements for hiring goals; rather, the collection of data only reflects the practices of the collecting organization, which should be confident that its practices are fair and equitable and that that confidence should be demonstrated in its data.