[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.
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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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