By Kevin Mooney — Government agencies and private contractors must incorporate racial and gender preferences into their employment practices under Section 342 of the financial regulation bill, which passed the House on June 30. This key provision calls for the creation of at least 20 new Offices of Minority and Women inclusion.
The affected agencies include: The Treasury, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the 12 Federal Reserve regional banks, the Board of Governors of the Fed, the National Credit Union Administration, the Comptroller of the Currency, the Securities and Exchange Commission and the newly Consumer Financial Protection Bureau.
Federal agents would be responsible for ensuring that an appropriate mix of women and minorities were operating not only in government but also within the workforces of contractors and subcontractors, Diana Furchtgott-Roth, a senior fellow with the Hudson Institute has warned.
“Section 324’s provisions are broad and vague and are certain to increase inefficiency in federal agencies,” she has observed. “To comply, federal agencies are likely to find it easier to employ and contract with less-qualified women and minorities, merely in order to avoid regulatory trouble. This would in turn decrease the agencies’ efficiency, productivity and output, while increasing their costs.”
Hiring managers will be forced to determine whether or not a “fair” ratio of women and minorities are being employed in agencies and in particular projects; that’s a tall order. The bill does stipulate that fair employment tests should be applied against “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 interjection of racial and gender preferences into America’s financial section deserves greater media exposure and should figure prominently into the debate when the U.S. Senate returns from recess to vote on the bill, which is sponsored by Rep. Barney Frank (D-Mass.) and Sen. Chris Dodd (D-Conn.).
Frank and Dodd have also slid additional amendments into the bill that have not been voted on in either the House or the Senate. Wavering lawmakers such as Sen. Scott Brown (R-Mass.), who previously supported the bill, should be asked about obscure provisions that expand federal authority. The Obama Administration should also be asked how it reconciles its stated opposition to racial profiling with its support for racial preferences.
