FR2100_20160229_omb

Supporting Statement for the
Joint Standards for Assessing Diversity Policies and Practices
(FR 2100; OMB No. 7100-to be assigned)
Summary
The Board of Governors of the Federal Reserve System, under delegated authority from
the Office of Management and Budget (OMB), proposes to implement the voluntary interagency
Joint Standards for Assessing Diversity Policies and Practices (Policy Statement) (FR 2100;
OMB No. 7100-to be assigned). Section 342 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010 (Dodd-Frank Act) requires the Office of the Comptroller of the
Currency (OCC), Board of Governors of the Federal Reserve System (Board), Federal Deposit
Insurance Corporation (FDIC), National Credit Union Administration (NCUA), Bureau of
Consumer Financial Protection (CFPB), and Securities and Exchange Commission (SEC) (the
agencies) each to establish an Office of Minority and Women Inclusion (OMWI) to be
responsible for all matters of the agency relating to diversity in management, employment, and
business activities.
The Policy Statement includes Joint Standards that cover “Practices to Promote
Transparency of Organizational Diversity and Inclusion.” These Joint Standards expect a
regulated entity to be transparent about its diversity and inclusion activities by making certain
information available to the public annually on its websites or through other appropriate
communications methods, in a manner reflective of the entity’s size and other characteristics. In
addition, the Policy Statement includes Joint Standards that address “Entities’ Self-Assessment”
and that a regulated entity, in a manner reflective of its size and other characteristics, is
encouraged to publish information pertaining to its efforts with respect to the Joint Standards.
The Federal Reserve’s annual reporting burden is estimated to be 5,856 hours and a one-time
implementation burden of 1,952 hours.
Background and Justification
Section 342(c)(1) of the Dodd-Frank Act requires each OMWI Director to “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.” The Dodd-Frank Act also instructed each OMWI Director
to develop standards for assessing the diversity policies and practices of entities regulated by the
agency.
The agencies would use the information provided to them to monitor progress and trends
in the financial services industry with regard to diversity and inclusion in employment and
contracting activities, as well as to identify and highlight those policies and practices that have
been successful. The primary federal financial regulator will share information with other
agencies, when appropriate, to support coordination of efforts and to avoid duplication. The
agencies may publish information disclosed to them, such as best practices, in any form that does
not identify a particular entity or individual or disclose confidential business information.

Description of Information Collection
The Policy Statement includes Joint Standards that cover “Practices to Promote
Transparency of Organizational Diversity and Inclusion.” These Joint Standards contemplate
that a regulated entity is transparent about its diversity and inclusion activities by making certain
information available to the public annually on its websites or through other appropriate
communications methods, in a manner reflective of the entity’s size and other characteristics.
The specific information referenced in these standards is (1) the entity’s diversity and inclusion
strategic plan; (2) its policy on its commitment to diversity and inclusion; (3) its progress toward
achieving diversity and inclusion in its workforce and procurement activities (which may include
the entity’s current workforce and supplier diversity demographic profiles); and (4) opportunities
available at the entity that promote diversity. The individual entity would determine the type and
extent of information that demonstrates its progress toward achieving diversity and inclusion.
The information supplied would be commensurate with the size and complexity of the entity. No
specific information is required by the agencies. In addition, opportunities that promote diversity
would vary by entity and, therefore, would not be specified by the agencies. Examples of such
opportunities could be current employment and procurement opportunities; forecasts of potential
employment and procurement opportunities; and the availability of mentorship and
developmental programs for employees and contractors.
In addition, the Policy Statement includes Joint Standards that address “Entities’ SelfAssessment.” The Joint Standards for Entities’ Self-Assessment envision that a regulated entity,
in a manner reflective of its size and other characteristics, (1) conducts annually a voluntary selfassessment of its diversity policies and practices; (2) monitors and evaluates its performance
under its diversity policies and practices on an ongoing basis; (3) provides information pertaining
to its self-assessment to the OMWI Director of its primary federal financial regulator; and (4)
publishes information pertaining to its efforts with respect to the Joint Standards.
Time Schedule for Information Collection and Publication
The agencies may publish information disclosed to them, such as best practices, in any
form that does not identify a particular entity or individual or disclose confidential business
information.
Legal Status
The Board’s Legal Division has determined that the FR 2100 is authorized by section 342
of the Dodd-Frank Act, which requires the Board’s OMWI director to develop standards for
assessing regulated entities’ diversity policies and practices and is voluntary.
The Standard regarding transparency, and a portion of the self-assessment Standard, call
for regulated entities to provide information to the public, so confidentiality is not an issue with
respect to those aspects of the Policy. A regulated entity may provide self-assessment material to
the Board that contains confidential commercial information protectable under exemption 4 of
the Freedom of Information Act (5 U.S.C. § 552(b)(4)), and may request that the information be
kept confidential on a case-by-case basis. The Board will determine whether the information is

2

entitled to confidential treatment on an ad hoc basis in connection with such a request. As noted
in the Policy Statement, an entity’s primary federal regulator may share information obtained
from regulated entities with other agencies, but will publish information disclosed to them only
in a form that does not identify a particular entity or individual or disclose confidential business
information.
Consultation Outside the Agency
On October 25, 2013, the agencies jointly published a notice on the proposed Interagency
Policy Statement Establishing Joint Standards for Assessing the Diversity Policies and Practices
in the Federal Register (78 FR 64052). The agencies determined that the Policy Statement
contained no collections of information requiring approval by the OMB. In response to
comments received, the agencies amended the Policy Statement. On June 10, 2015, the agencies
jointly published a notice on the final Policy Statement in the Federal Register (80 FR 33016)
requesting public comment for 60 days, as the final Policy Statement contained new collections
of information requiring approval by the OMB. The comment period for this notice expired on
August 10, 2015.
The agencies collectively received four comment letters; two from industry trade
associations, one from an advocacy organization, and one from an individual.1 The comments
addressed the collection of information under the Joint Standards that address “Entities’ SelfAssessment.” (These Joint Standards envision that a regulated entity should “provide information
pertaining to the self-assessments of its diversity policies and practices to the OMWI Director of
its primary federal financial regulator.”) The commenters also commented on aspects of the
Policy Statement unrelated to the collection of information; these views are not relevant to this
supporting statement and, accordingly, they are not addressed below.
Detailed Discussion of Public Comments
Practical Utility of Information Collection
Two commenters addressed whether the collection of information pertaining to selfassessments will have practical utility. One commenter asserted that it is premature to gauge how
useful information will be without knowing precisely what information the agencies will request.
This commenter assumed that the agencies would provide details about the information to be
submitted or develop an information collection instrument. The commenter offered to meet with
OMWI Directors to discuss any draft information collection documents.
The other commenter maintained that the information collection request in the Policy
Statement will yield large variations in the information submitted and predicted that the
information received will have little practical utility. The commenter noted that the information
submitted should be standardized in order for the agencies to accurately assess the state of
1

NCUA joined in issuing the 60-day Federal Register notice and request for comments on the information
collection. The National Association of Federal Credit Unions (NAFCU) submitted a comment letter to NCUA
during the comment period, which was shared among the agencies. Accordingly, the comment letter from NAFCU
is included in the discussion of comments below.

3

diversity and inclusion across the industry. The commenter’s view is that standardization of the
data request would enhance quality, utility, and clarity of the collected information.
Although the agencies have not specified the content or format for the information
collection described in the Policy Statement, they anticipate that the information submitted to
them will be similar in content, if not in form. This is because they contemplate that regulated
entities will organize their information collection around the categories in the Joint Standards.
The agencies also expect that the information they receive will help achieve the purpose of the
collection, to allow the agencies to monitor progress and trends in the financial services industry
regarding diversity and inclusion in employment and contracting and to identify and highlight
those policies and practices that have been successful.
Specific Collection Instrument
Three commenters requested that the agencies be more specific about the information
collection. One commenter asked the agencies to send questions that “comport with how its
member firms operate” and that the information collection request allow entities to submit
qualitative information to add context to quantitative submissions.
Another commenter asked the agencies to provide a “robust” example or template of how
best to submit information. The commenter also recommended that the agencies provide a nonexhaustive list of materials that respondents can use to compare against what they are planning to
submit.
The third commenter recommended that the agencies develop a standardized collection
instrument. The commenter stated that the comment letter it submitted in response to the
proposed Policy Statement recommended questions for a standardized survey. The commenter
urged the agencies to adopt a thorough framework for collecting specific and consistent data.
The agencies appreciate receiving collection instrument recommendations and offers to
assist in developing an instrument. At this time, however, the agencies have not developed a joint
information collection instrument. The agencies believe that the Policy Statement encourages
regulated entities to provide information regarding their self-assessments in a manner reflective of
the Joint Standards and that any such information received will be useful.
Assurance of Confidentiality
The Joint Standards addressing Entities’ Self-Assessments provide that the entities
submitting information may designate such information as confidential commercial information,
where appropriate. Three commenters expressed concerns about whether this information
submitted would remain confidential. One commenter indicated that its members are concerned
that information submitted to their primary regulator might be sent, without context, to other
regulators or to the U.S. Congress and lead to confusion or the disclosure of competitive
information. This commenter asked the agencies to provide a clearer confidentiality policy and
suggested that the agencies make clear that submissions will remain confidential unless the
submitting entity expressly waives confidentiality.

4

Similarly, another commenter stated that its members are concerned that third parties may
have access to information they submit and could use this information to the disadvantage of the
submitters. The commenter requested additional clarification regarding how the agencies will use
and protect submitted information, as well as a written statement providing assurance that
information would not be shared with third parties.
The remaining commenter expressed concern that designating information as confidential
will not guarantee protection from disclosure. The commenter observed that, if the public
requests information under the Freedom of Information Act (FOIA), the regulated entity will be
notified of the request and provided the opportunity to argue against disclosure. In the event that
the entity’s argument does not prevail, a regulated entity could potentially have its voluntarily
submitted information released to the public under FOIA.
Two commenters recommended that regulated entities be allowed to submit information
anonymously. One commenter said its members might support the use of a third-party vendor
that could capture and potentially anonymize submissions as a way to minimize information
collection burden. The other commenter asserted that by giving respondents the option to submit
information anonymously, the agencies would enhance the quality, utility, and clarity of
information submitted, minimize burden, and address confidentiality concerns. This commenter
recommended that respondents be allowed to classify themselves through general categories, such
as approximate asset size, number of employees, and geographic location.
The agencies understand that regulated entities want assurances that the information
submitted will be considered confidential and sensitive and will not be disclosed unless
confidentiality is expressly waived. To the extent the submissions include confidential
information, the agencies will keep such information confidential to the extent allowed by law.
A regulated entity may provide self-assessment material to the Federal Reserve that contains
confidential commercial information protectable under exemption 4 of the Freedom of
Information Act and may request that the information be kept confidential on a case-by-case
basis. The Federal Reserve will determine whether the information is entitled to confidential
treatment on an ad hoc basis in connection with such a request.
With respect to anonymity, the agencies are concerned that anonymous submissions would
be less useful than submissions in which the submitting entity is identified. As indicated in the
Policy Statement, the OMWI Directors plan to reach out to regulated entities to discuss diversity
and inclusion practices and methods of assessment, and these contacts will be more informative
for both the agencies and the entities if the agencies know which submission came from which
entity. However, the agencies will reassess this matter over time.
Accuracy of Burden Estimate
The agencies estimated that it would take an entity 12 burden hours, on average, to publish
information pertaining to its diversity policies and practices on its website and to retrieve and
submit self-assessment information to its primary federal financial regulator. One commenter
stated that the agencies grossly underestimated the time it would take to collect, categorize, and
submit this information. The commenter asserted that retrieving diversity data is a time-

5

consuming and labor-intensive task, particularly for entities with hundreds or thousands of
employees throughout the country and the world. In addition, the commenter maintained that an
entity’s submission would have to undergo a time consuming review by legal counsel and others
to assure accuracy and clarity before it is submitted to the primary federal financial regulator.
The agencies note that the commenter did not provide an alternative estimate or formula
for calculating the burden hours. In the absence of any alternative estimates or formulas, the
agencies are not changing the burden estimate at this time. If, however, future feedback indicates
that the current estimate of burden hours needs further refinement, the agencies will consider
adjusting their estimates accordingly.
Estimate of Start-Up Costs
One commenter asserted that it would take substantial information technology, legal, and
operational resources to put diversity data into a format appropriate for submission to a regulator.
The commenter said that it could not provide an exact estimate of capital or start-up costs for
submitting this information until an actual information request is available.
In response, there are no capital costs associated with the collection of information, such
as new information technology, legal, and operational resources. With regard to start-up costs,
the agencies note that the self-assessment is designed for entities with 100 or more employees,
which already have systems in place to track and report diversity data in order to comply with
Title VII of the Civil Rights Act of 1964. Best practices indicate that successful organizations
recognize and are attentive to diversity and inclusion. The agencies held roundtables with
regulated entities and industry trade associations prior to drafting the joint standards. In addition,
they met with a number of regulated entities following the issuance of the standards to address
questions. The agencies clarified that entities would conduct their self-assessments and
voluntarily provide information to the agencies and the public. The information provided would
be commensurate with the size and complexity of the entity. Lastly, the agencies are considering
the development of a voluntary template or guidance to assist entities with their self-assessments.
To address the commenter’s concern indicated above, the agencies are estimating burden
for possible preparation activities that could be performed prior to conducting the self-assessment.
The agencies anticipate that 4 hours will be sufficient to prepare to conduct the self-assessment.
On November 6, 2015, the agencies published a final notice in the Federal Register
(80 FR 68901).
Estimate of Respondent Burden
The collection of information contemplated by the Joint Standards imposes no new
recordkeeping burdens as regulated entities will only publish or provide information pertaining
to diversity policies and practices that they maintain during the normal course of business. The
agencies estimate that it will take a regulated entity 12 burden hours, on average, to (1) to
publish annually information pertaining to diversity policies and practices on the entity’s website
or in other appropriate communications and (2) to retrieve and submit information pertaining to

6

the entity’s self-assessment of its diversity policies and practices to its primary federal financial
regulator. In addition, the agencies estimate a one-time implementation burden of 4 hours. The
total annual burden for the FR 2100 represents less than one percent of the total Federal Reserve
System paperwork burden.
Number of
Annual
respondents frequency

FR 2100

Estimated
average hours
per response

Estimated
annual burden
hours

Policy Statement

488

1

12

5,856

One-time implementation

488

1

4

1,952

Total

7,808

The total cost to the public for this information collection is estimated to be $788,608.2
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as defined by
OMB guidelines.
Estimate of Cost to the Federal Reserve System
The cost to the Federal Reserve System is negligible.

2

To estimate average hourly wages for entities regulated by the OCC, Board, FDIC, and CFPB, the agencies
reviewed data from May 2014 for wages (by industry and occupation) from the U.S. Bureau of Labor Statistics
(BLS) for Depository Credit Intermediation (NAICS 522100). To estimate compensation costs associated with the
collection of information under the Joint Standards, the agencies used $101 per hour. This is based on the average
of the 90th percentile for seven occupations (accountants and auditors, compliance officers, financial analysts,
lawyers, management occupations, software developers, and statisticians) adjusted for inflation (at 2 percent), plus
an additional 30 percent to cover private sector benefits (30 percent represents the average private sector costs of
employee benefits).

7