Federally insured credit unions are encouraged to complete a 2018 voluntary diversity self-assessment and to submit it to their federal regulator’s Office of Minority and Women Inclusion (OMWI) before Dec. 31, the regulator said in a Letter to Credit Unions issued Wednesday.
The National Credit Union Admistration (NCUA) began collecting the voluntary diversity self-assessments in 2016, according to the letter (18-CU-05), and it uses the data to monitor progress and trends in credit union diversity-related activities. NCUA says the OMWI aggregates the self-assessment data and only shares results anonymously, primarily in the NCUA’s annual OMWI Congressional Report and in the annual Voluntary Credit Union Diversity Self-Assessment Results Report.
NCUA and banking agencies, to comply with a requirement in Section 342 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), in 2015 finalized an Interagency Policy Statement establishing joint standards for assessing the diversity policies and practices of regulated entities. The statement encourages financial depository institutions, particularly those with 100 or more employees, to consider adopting and incorporating these diversity standards into ongoing business and hiring practices.
The policy statement is not a rule and sets no legal compliance obligations, NCUA notes, and the implementation or use of the suggested diversity standards “is completely voluntary.”
“The business case for diversity in credit unions is simple: diversity is a good investment. It makes good business sense to have board members, managers, and employees reflect the community the credit union serves,” NCUA Chairman J. Mark McWatters says in the letter. “Diversity leads to better service, greater innovation, improved solutions and increased membership. These things make credit unions strong and sustainable, which ultimately leads to greater strength for the entire credit union system.”
NCUA says the standards in the policy statement provide a framework for credit unions to create and strengthen their diversity policies and practices, including their organizational commitment to diversity, workforce profile and employment practices, procurement and business practices, and practices to promote transparency of organizational diversity and inclusion. Each credit union may use the standards in a manner that best aligns with its unique characteristics, the agency notes.
The data also informs the agency of areas where guidance would be useful in assisting credit unions with diversity efforts, the agency notes. (For example, in 2018, the NCUA issued a Credit Union Guide to Supplier Diversity.)
The recently updated self-assessment form, instructions for completing it, and diversity-related tools and resources are available on NCUA’s Credit Union Diversity webpage. The self-assessment form is accessible here.