WASHINGTON—The credit union system has a shared commitment to advancing diversity and inclusion, CUNA told Congress, while simultaneously expressing worries a new proposal will require employment diversity data from all institutions regardless of size.
CUNA sent the letter to the House Financial Services Subcommittee on diversity and inclusion, which held a hearing discussing diversity and inclusion (DEI) accountability at large banks.
The House Financial Services Committee also released a report in conjunction with the hearing that evaluates bank and savings and loans holding companies with more than $50 billion in assets. However, CUNA said it is concerned that the legislative recommendations and proposed bills stemming from the report would apply to all financial institutions regardless of their size.
“While the Committee has fashioned its data reporting, public disclosure, and board diversity requirements based on an assessment of the practices and resources of institutions with $50 billion or more in assets, credit unions have an average of $286 million in assets by comparison,” the letter reads. “Currently, the median number of assets under a credit union’s management is $35 million. Thus, credit unions have significantly less resources to accomplish diversity and inclusion initiatives than large banks and, accordingly, should not be judged using identical assessment criteria or subjected to identical obligations.”
Dodd-Frank Act Cited
The letter cites the Dodd-Frank Act, which directs federal financial regulators to develop standards for assessing diversity, and 2015 interagency guidance that specifically rejects the notion that DEI standards can be applied to all financial institutions with a one-size-fits all approach.
CUNA also noted that even the interagency assessment focused on financial institutions with 100 or more employees when recommending the reporting of diversity and inclusion data and implementation of best practices. Presently, 79% of federally insured credit unions employ less than 50 people, CUNA said.
“The Committee’s current legislative proposals to require employment diversity data from all institutions, without regard to staff size, would impose significant new data collection and reporting obligations on the vast majority of credit unions, even though these institutions collectively employ only one-quarter of all employees working at federally insured credit unions today,” the letter reads. “We urge the Committee to reconsider this approach.”
The letter also highlights several recent moves by CUNA designed to advance DEI in the financial services sector, including a board resolution to add DEI to the set of cooperative principles.