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Financial Reform Bill Diversity Requirement Has Challenges

Volume 3 Issue 2                    Article by Dr. Derrick L. Campbell, Ed.D.           September 2010

The newly passed Financial Reform Bill diversity requirement does not include a process that transforms the thinking of persons who are involved in the financial industry.

In July 2010, President Barak Obama signed into law the financial reform bill which is designed to change the way that banks operate to include one provision which requires every federal financial agency to establish an Office of Minority and Women.

The agencies will be required to establish standards for “increased participation of minority-owned and women-owned businesses in the programs and contracts of the agency” and for “assessing the diversity policies and practices of entities regulated by the agency.”

The government agencies will find that most financial agencies are in compliance with federal anti-discrimination regulations. Therefore they will develop standards that will only touch the surface of this challenge.

The standards will not address the type of thinking that has made the financial industry a challenge for minorities and women. Even minorities in the financial industry may be insensitive to the industry cultural challenges.

Recently I interviewed an African American male who has a successful practice in the financial industry. When asked about the diversity challenges in the industry he responded that “the only color on Wall Street is green”.

In addition, several business and banking groups claimed that the provision could give federal agencies unprecedented powers in dictating the lending and hiring practices of private financial institutions.

It is this type of thinking that will undermine the intent of the provision. Financial industry personnel, businesses, and banking groups will find blame and fault in anything else except for how their behavior and thinking contributes to the undermining of the provision. They will eventually focus only on negative aspects which may compromise the process for increasing minority and women participation. 

The federal agencies must develop programs that transform the thinking of persons in the financial industry.

The federal agencies can accomplish this process by using reflective practice and implementing diversity programs that will transform the thinking of individuals in the financial industry.

     
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