[House Report 117-350]
[From the U.S. Government Publishing Office]


117th Congress   }                                     {        Report
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                     {       117-350

======================================================================



 
  DIVERSITY AND INCLUSION DATA ACCOUNTABILITY AND TRANSPARENCY ACT OF 
                                  2021

                                _______
                                

  June 7, 2022.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Ms. Waters, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 2123]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 2123) to amend the Dodd-Frank Wall Street Reform 
and Consumer Protection Act to require regulated entities to 
provide information necessary for the Offices of Women and 
Minority Inclusion to carry out their duties, and for other 
purposes, having considered the same, reports favorably thereon 
with an amendment and recommends that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Section-by-Section Analysis of the Legislation...................     2
Hearings.........................................................     3
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     5
Statement of Performance Goals and Objectives....................     5
New Budget Authority and C.B.O. Cost Estimate....................     5
Committee Cost Estimate..........................................     8
Federal Mandates Statement.......................................     8
Advisory Committee Statement.....................................     8
Applicability to Legislative Branch..............................     8
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
  Benefits.......................................................     8
Duplicative Federal Programs.....................................     9
Changes to Existing Law..........................................     9

    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Diversity and Inclusion Data 
Accountability and Transparency Act of 2021''.

SEC. 2. DISCLOSURES BY REGULATED ENTITIES.

  Section 342(b) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (12 U.S.C. 5452(b)) is amended by adding at the end the 
following:
          ``(5) Disclosures by regulated entities.--The Director of 
        each Office shall require entities with 100 employees or 
        greater regulated by the applicable agency to provide such 
        information as may be required to carry out the duties of the 
        Director.''.

                          Purpose and Summary

    On March 23, 2021, Representative Beatty introduced H.R. 
2123, the ``Diversity and Inclusion Data Accountability and 
Transparency Act'', or ``D&I DATA Act,'' which would require 
the entities regulated by Treasury, Federal Depository 
Insurance Corporation, Federal Housing Finance Agency, Federal 
Reserve banks, Federal Reserve Board, National Credit Union 
Administration, Office of the Comptroller of the Currency, 
Securities and Exchange Commission, and Consumer Financial 
Protection Bureau to disclose diversity data, policies, and 
practices to their respective federal financial regulators and 
the Offices of Minority and Women Inclusion within those 
agencies.

                  Background and Need for Legislation

    Section 342 of Dodd-Frank established the Offices of 
Minority and Women Inclusion (OMWIs) at federal financial 
regulatory agencies. Pursuant to Section 342(b)(2)(C), in June 
2015, six financial regulatory agencies published the Joint 
Standards for Assessing the Diversity Policies and Practices of 
Entities Regulated by the Agencies, which focus on a regulated 
entity's D&I performance and data, including workforce and 
procurement spending, among other metrics. However, because of 
an amendment made before the passage of Dodd-Frank, financial 
regulators interpreted that the collection of diversity 
assessments from OMWI regulated entities, and any actions based 
off of those assessments, should be voluntary. As a result, 
regulated entities have generally declined to participate in 
the OMWIs' annual diversity assessment requests. As of October 
2020, two agencies were only starting to request assessments or 
had reduced the frequency of their assessments. This bill would 
provide explicit direction to regulators that diversity data 
disclosure by their regulated entities should be compulsory.

                      Section-by-Section Analysis


Section 1. Short title

           This section provides a short title for this 
        act, ``Diversity and Inclusion Data Accountability and 
        Transparency Act''.

Section 2. Disclosures and regulated entities

           This section amends section 342(b)(5) of the 
        Dodd-Frank Wall Street Reform and Consumer Protection 
        Act. This section also requires entities regulated by 
        Treasury, Federal Depository Insurance Corporation, 
        Federal Housing Finance Agency, Federal Reserve banks, 
        Federal Reserve Board, National Credit Union 
        Administration, Office of the Comptroller of the 
        Currency, Securities and Exchange Commission, and 
        Consumer Financial Protection Bureau with 100 employees 
        or more to disclose information necessary for the 
        Directors of the Offices of Women and Minority 
        Inclusion to carry out their duties.

                                Hearings

    For the purposes of section 3(c)(6) of House Rule XIII, the 
Committee on Financial Services' Subcommittee Diversity & 
Inclusion held hearings to consider H.R. 2123 entitled, ``By 
the Numbers: How Diversity Data Can Measure Commitment to 
Diversity, Equity and Inclusion'' on March 18, 2021, and ``A 
Review of Diversity and Inclusion Performance at America's 
Large Investment Firm,'' on December 9, 2021. The Full 
Committee also considered the bill on April 27, 2022 in a 
hearing entitled ``Consumers First: Semi-Annual Report of the 
Consumer Financial Protection Bureau.''

                        Committee Consideration

    The Committee on Financial Services met in open session on 
April 21, 2021 and ordered H.R. 2123 to be reported favorably 
to the House with an amendment in the nature of a substitute by 
a vote of 30 yeas and 23 nays, a quorum being present.

                  Committee Votes and Roll Call Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following roll call votes occurred during the Committee's 
consideration of H.R. 2123: Ordered reported to the House, as 
amended, with a favorable recommendation by a recorded vote of 
30 yeas and 23 nays.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the descriptive portions of this report.

             Statement of Performance Goals and Objectives

    Pursuant to clause (3)(c) of rule XIII of the Rules of the 
House of Representatives, the goals of H.R. 2123 are to require 
regulated entities to disclose diversity data, policies and 
practices to their respective federal financial regulators.

               New Budget Authority and CBO Cost Estimate

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974, and pursuant to clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following estimate for 
H.R. 2123 from the Director of the Congressional Budget Office:
                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, July 8, 2021.
Hon. Maxine Waters,
Chairwoman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Madam Chairwoman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2123, the 
Diversity and Inclusion Data Accountability and Transparency 
Act of 2021.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is David Hughes.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    The bill would
           Require banking and financial entities to 
        disclose data on diversity in management, employment, 
        and business activities to their federal financial 
        regulators
           Impose a private-sector mandate by requiring 
        companies to report additional information to federal 
        regulators and increase the cost of an existing mandate 
        on companies if regulators raise fees to pay for 
        implementation of the bill
    Estimated budgetary effects would mainly stem from
           Additional responsibilities for certain 
        federal financial regulators
    Bill summary: H.R. 2123 would require banking and financial 
entities to disclose data on diversity in management, 
employment, and business activities to their regulator's Office 
of Minority and Women Inclusion. The financial regulators that 
would receive the new diversity information include the 
Consumer Financial Protection Bureau (CFPB), Federal Deposit 
Insurance Corporation (FDIC), National Credit Union 
Administration (NCUA), Office of the Comptroller of the 
Currency (OCC), Federal Reserve, and Securities and Exchange 
Commission (SEC).
    Basis of estimate: The costs of the legislation fall within 
budget function 370 (commerce and housing credit). Based on 
information from the affected agencies, CBO estimates that each 
agency would need two additional employees to write regulations 
and process the new diversity data each year. Each agency also 
would incur costs to initially upgrade and annually update its 
information technology systems. The estimated costs do not 
include agency efforts beyond collecting and processing the new 
data. Costs would be higher if agencies used the data more 
broadly in their regulatory and supervisory activities.
    Assuming enactment late in fiscal year 2021, CBO estimates 
that H.R. 2123 would increase net direct spending by $13 
million, decrease revenues by $6 million, and thus increase the 
federal deficit by $19 million over the 2021-2031 period (see 
Table 1). In addition, there would be an insignificant effect 
on spending subject to appropriation.
    Direct spending: The operating costs for the CFPB, FDIC, 
NCUA, and OCC are classified in the federal budget as direct 
spending. Using information from those agencies, CBO estimates 
that implementing the bill would increase gross direct spending 
by $25 million over the 2021-2031 period. However, the NCUA and 
OCC collect fees from financial institutions to offset their 
operating costs; those fees are treated as reductions in direct 
spending. On net, CBO estimates that direct spending would 
increase by $13 million over the 2021-2031 period.
    Revenues: Costs incurred by the Federal Reserve reduce 
remittances to the Treasury, which are recorded in the budget 
as revenues. CBO estimates that enacting H.R. 2123 would 
decrease revenues by $6 million over the 2021-2031 period.
    Spending subject to appropriation: Using information from 
the SEC, CBO estimates that it would cost the agency $4 million 
over the 2021-2026 period to implement the bill's requirements. 
However, because the SEC is authorized to collect fees each 
year to offset its annual appropriation, CBO expects that the 
net effect over the 2021-2026 period would be negligible, 
assuming appropriation actions consistent with that authority.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays and revenues that are 
subject to those pay-as-you-go procedures are shown in Table 1.

  TABLE 1.--CBO'S ESTIMATE OF THE STATUTORY PAY-AS-YOU-GO EFFECTS OF H.R. 2123, THE DIVERSITY AND INCLUSION DATA ACCOUNTABILITY AND TRANSPARENCY ACT OF
                                2021, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON FINANCIAL SERVICES ON APRIL 21, 2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     By fiscal year, millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2021   2022   2023   2024   2025   2026   2027   2028   2029   2030   2031  2021-2026  2021-2031
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Net Increase in the Deficit
 
Pay-As-You-Go Effect.................................      0      2      2      2      2      2      2      2      2      2      2         9         19
Memorandum:
    Increases in Outlays.............................      0      1      1      1      1      1      1      1      1      1      1         6         13
    Decreases in Revenues............................      0      0     -1     -1     -1     -1     -1     -1     -1     -1     -1        -3         -6
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Increase in long-term deficits: CBO estimates that enacting 
H.R. 2123 would not significantly increase on-budget deficits 
by more than $5 billion in any of the four consecutive 10-year 
periods beginning in 2032.
    Mandates: By requiring certain private-sector companies to 
report additional information to federal financial regulators, 
H.R. 2123 would impose a private-sector mandate as defined in 
the Unfunded Mandates Reform Act (UMRA). The cost of the 
mandate would equal the expenses incurred by those companies to 
comply with the new disclosure requirements. Because the 
mandated entities already collect and report similar 
information to federal regulators, CBO estimates those costs 
would not exceed the private-sector threshold established in 
UMRA ($170 million 2021, adjusted annually for inflation).
    If federal regulators increase annual fee collections to 
offset the costs associated with implementing the bill, H.R. 
2123 would increase the cost of an existing private-sector 
mandate on commercial entities required to pay those fees. CBO 
estimates that the incremental cost of the mandate would be 
small and would fall well below the threshold established in 
UMRA for private-sector mandates.
    H.R. 2123 contains no intergovernmental mandates as defined 
in UMRA.
    Estimate prepared by: Federal Costs: David Hughes (CFPB, 
SEC), Stephen Rabent (FDIC, NCUA, OCC), Nathaniel Frentz 
(Federal Reserve); Mandates: Fiona Forrester.
    Estimate reviewed by: Susan Willie, Chief, Natural and 
Physical Resources Cost Estimates Unit; Josh Shakin, Chief, 
Revenue Estimating Unit; Kathleen FitzGerald, Chief, Public and 
Private Mandates Unit; H. Samuel Papenfuss, Deputy Director of 
Budget Analysis; Theresa Gullo, Director of Budget Analysis.

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 2123. 
However, clause 3(d)(2)(B) of that rule provides that this 
requirement does not apply when the committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act.

                       Unfunded Mandate Statement

    Pursuant to Section 423 of the Congressional Budget and 
Impoundment Control Act (as amended by Section 101(a)(2) of the 
Unfunded Mandates Reform Act, Pub. L. 104-4), the Committee 
adopts as its own the estimate of federal mandates regarding 
H.R. 2123, as amended, prepared by the Director of the 
Congressional Budget Office.

                           Advisory Committee

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

              Application of Law to the Legislative Branch

    Pursuant to section 102(b)(3) of the Congressional 
Accountability Act, Pub. L. No. 104-1, H.R. 2123, as amended, 
does not apply to terms and conditions of employment or to 
access to public services or accommodations within the 
legislative branch.

                           Earmark Statement

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 2123 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as described in clauses 9(e), 9(f), and 9(g) of rule 
XXI.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee states that no 
provision of H.R. 2123 establishes or reauthorizes a program of 
the Federal Government known to be duplicative of another 
federal program, a program that was included in any report from 
the Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                        Changes to Existing Law

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, H.R. 2123, as reported, are shown as follows:

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

       DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT




           *       *       *       *       *       *       *
 TITLE III--TRANSFER OF POWERS TO THE COMPTROLLER OF THE CURRENCY, THE 
CORPORATION, AND THE BOARD OF GOVERNORS

           *       *       *       *       *       *       *


Subtitle D--Other Matters

           *       *       *       *       *       *       *


SEC. 342. OFFICE OF MINORITY AND WOMEN INCLUSION.

  (a) Office of Minority and Women Inclusion.--
          (1) Establishment.--
                  (A) In general.--Except as provided in 
                subparagraph (B), not later than 6 months after 
                the date of enactment of this Act, each agency 
                shall establish an Office of Minority and Women 
                Inclusion that shall be responsible for all 
                matters of the agency relating to diversity in 
                management, employment, and business 
                activities.
                  (B) Bureau.--The Bureau shall establish an 
                Office of Minority and Women Inclusion not 
                later than 6 months after the designated 
                transfer date established under section 1062.
          (2) Transfer of responsibilities.--Each agency that, 
        on the day before the date of enactment of this Act, 
        assigned the responsibilities described in paragraph 
        (1) (or comparable responsibilities) to another office 
        of the agency shall ensure that such responsibilities 
        are transferred to the Office.
          (3) Duties with respect to civil rights laws.--The 
        responsibilities described in paragraph (1) do not 
        include enforcement of statutes, regulations, or 
        executive orders pertaining to civil rights, except 
        each Director shall coordinate with the agency 
        administrator, or the designee of the agency 
        administrator, regarding the design and implementation 
        of any remedies resulting from violations of such 
        statutes, regulations, or executive orders.
  (b) Director.--
          (1) In general.--The Director of each Office shall be 
        appointed by, and shall report to, the agency 
        administrator. The position of Director shall be a 
        career reserved position in the Senior Executive 
        Service, as that position is defined in section 3132 of 
        title 5, United States Code, or an equivalent 
        designation.
          (2) Duties.--Each Director shall develop standards 
        for--
                  (A) equal employment opportunity and the 
                racial, ethnic, and gender diversity of the 
                workforce and senior management of the agency;
                  (B) increased participation of minority-owned 
                and women-owned businesses in the programs and 
                contracts of the agency, including standards 
                for coordinating technical assistance to such 
                businesses; and
                  (C) assessing the diversity policies and 
                practices of entities regulated by the agency.
          (3) Other duties.--Each Director shall advise the 
        agency administrator on the impact of the policies and 
        regulations of the agency on minority-owned and women-
        owned businesses.
          (4) Rule of construction.--Nothing in paragraph 
        (2)(C) 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.
          (5) Disclosures by regulated entities.--The Director 
        of each Office shall require entities with 100 
        employees or greater regulated by the applicable agency 
        to provide such information as may be required to carry 
        out the duties of the Director.
  (c) Inclusion in All Levels of Business Activities.--
          (1) In general.--The Director of each Office shall 
        develop and implement standards and procedures to 
        ensure, to the maximum extent possible, the fair 
        inclusion and utilization of minorities, women, and 
        minority-owned and women-owned businesses in all 
        business and activities of the agency at all levels, 
        including in procurement, insurance, and all types of 
        contracts.
          (2) Contracts.--The procedures established by each 
        agency for review and evaluation of contract proposals 
        and for hiring service providers shall include, to the 
        extent consistent with applicable law, a component that 
        gives consideration to the diversity of the applicant. 
        Such procedure shall include a written statement, in a 
        form and with such content as the Director shall 
        prescribe, that a contractor shall ensure, to the 
        maximum extent possible, the fair inclusion of women 
        and minorities in the workforce of the contractor and, 
        as applicable, subcontractors.
          (3) Termination.--
                  (A) Determination.--The standards and 
                procedures developed and implemented under this 
                subsection shall include a procedure for the 
                Director to make a determination whether an 
                agency contractor, and, as applicable, a 
                subcontractor has failed to make a good faith 
                effort to include minorities and women in their 
                workforce.
                  (B) Effect of determination.--
                          (i) Recommendation to agency 
                        administrator.--Upon a determination 
                        described in subparagraph (A), the 
                        Director shall make a recommendation to 
                        the agency administrator that the 
                        contract be terminated.
                          (ii) Action by agency 
                        administrator.--Upon receipt of a 
                        recommendation under clause (i), the 
                        agency administrator may--
                                  (I) terminate the contract;
                                  (II) make a referral to the 
                                Office of Federal Contract 
                                Compliance Programs of the 
                                Department of Labor; or
                                  (III) take other appropriate 
                                action.
  (d) Applicability.--This section shall apply to all contracts 
of an agency for services of any kind, including the services 
of financial institutions, investment banking firms, mortgage 
banking firms, asset management firms, brokers, dealers, 
financial services entities, underwriters, accountants, 
investment consultants, and providers of legal services. The 
contracts referred to in this subsection include all contracts 
for all business and activities of an agency, at all levels, 
including contracts for the issuance or guarantee of any debt, 
equity, or security, the sale of assets, the management of the 
assets of the agency, the making of equity investments by the 
agency, and the implementation by the agency of programs to 
address economic recovery.
  (e) Reports.--Each Office shall submit to Congress an annual 
report regarding the actions taken by the agency and the Office 
pursuant to this section, which shall include--
          (1) a statement of the total amounts paid by the 
        agency to contractors since the previous report;
          (2) the percentage of the amounts described in 
        paragraph (1) that were paid to contractors described 
        in subsection (c)(1);
          (3) the successes achieved and challenges faced by 
        the agency in operating minority and women outreach 
        programs;
          (4) the challenges the agency may face in hiring 
        qualified minority and women employees and contracting 
        with qualified minority-owned and women-owned 
        businesses; and
          (5) any other information, findings, conclusions, and 
        recommendations for legislative or agency action, as 
        the Director determines appropriate.
  (f) Diversity in Agency Workforce.--Each agency shall take 
affirmative steps to seek diversity in the workforce of the 
agency at all levels of the agency in a manner consistent with 
applicable law. Such steps shall include--
          (1) recruiting at historically black colleges and 
        universities, Hispanic-serving institutions, women's 
        colleges, and colleges that typically serve majority 
        minority populations;
          (2) sponsoring and recruiting at job fairs in urban 
        communities;
          (3) placing employment advertisements in newspapers 
        and magazines oriented toward minorities and women;
          (4) partnering with organizations that are focused on 
        developing opportunities for minorities and women to 
        place talented young minorities and women in industry 
        internships, summer employment, and full-time 
        positions;
          (5) where feasible, partnering with inner-city high 
        schools, girls' high schools, and high schools with 
        majority minority populations to establish or enhance 
        financial literacy programs and provide mentoring; and
          (6) any other mass media communications that the 
        Office determines necessary.
  (g) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) Agency.--The term ``agency'' means--
                  (A) the Departmental Offices of the 
                Department of the Treasury;
                  (B) the Corporation;
                  (C) the Federal Housing Finance Agency;
                  (D) each of the Federal reserve banks;
                  (E) the Board;
                  (F) the National Credit Union Administration;
                  (G) the Office of the Comptroller of the 
                Currency;
                  (H) the Commission; and
                  (I) the Bureau.
          (2) Agency administrator.--The term ``agency 
        administrator'' means the head of an agency.
          (3) Minority.--The term ``minority'' has the same 
        meaning as in section 1204(c) of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 
        1989 (12 U.S.C. 1811 note).
          (4) Minority-owned business.--The term ``minority-
        owned business'' has the same meaning as in section 
        21A(r)(4)(A) of the Federal Home Loan Bank Act (12 
        U.S.C. 1441a(r)(4)(A)), as in effect on the day before 
        the transfer date.
          (5) Office.--The term ``Office'' means the Office of 
        Minority and Women Inclusion established by an agency 
        under subsection (a).
          (6) Women-owned business.--The term ``women-owned 
        business'' has the meaning given the term ``women's 
        business'' in section 21A(r)(4)(B) of the Federal Home 
        Loan Bank Act (12 U.S.C. 1441a(r)(4)(B)), as in effect 
        on the day before the transfer date.

           *       *       *       *       *       *       *


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