The document provides biographies of individuals and information about firms involved in publishing a resource guide on diversity and Section 342 compliance. It includes biographies of Anthony Sharett and Keesha Warmsby, partners at Baker Hostetler LLP, and Kristin Messerli, president of Cultural Outreach Solutions. It also provides information on Baker Hostetler as a large international law firm and Cultural Outreach Solutions as a consulting firm specializing in diversity compliance. The document concludes with copyright and disclaimer information related to the resource guide.

1. Anthony M. Sharett
Partner, National Co-Chair
Financial Services Group
Baker Hostetler, LLP
Keesha N. Warmsby
Associate
Baker Hostetler, LLP
Kristin Messerli
President and Founder
Cultural Outreach Solutions
Diversity & Section 342
Resource Guide
MBA COMPLIANCE ESSENTIALS℠
mba.org/compliance
ONE VOICE. ONE VISION. ONE RESOURCE.
16716
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2. AUTHOR BIOGRAPHIES AND INFORMATION ABOUT THE FIRMS
Anthony Sharett is a partner and national co-leader of the
Financial Services Group as well as a member of the
Complex Commercial Litigation Practice Group in
BakerHostetler’s Columbus office. As an attorney, Sharett
focuses his litigation practice on consumer financial services
and litigation and regulatory enforcement. He has
successfully defended lawsuits including class actions
relating to FDCPA, FCRA, TILA, RESPA laws and state consumer statutes. Sharett
also counsels clients through Consumer Financial Protection Bureau enforcement
actions though resolution. He is lead counsel for the Ohio Mortgage Bankers
Association. Sharett maintains a national commercial litigation practice, regularly
defending financial institutions and insurance companies against regulatory actions and
consumer-led litigation in individual and class action matters. He also advises financial
services companies on compliance matters, identifying potential issues and preparing
policies and procedures.
As a former attorney with the Ohio Department of Commerce, Sharett has extensive
knowledge of the banking, mortgage, credit union, and specialty finance industries.
Utilizing a comprehensive approach to counseling, paired with this experience as a
former regulator, he understands the key issues that arise within these sectors to
proactively assist clients prior to or during litigation or enforcement.
Sharett has been recognized by Best Lawyers in America for Commercial Litigation and
received the National Diversity Council Multicultural Leadership Award and is the
Diversity & Inclusion Director for the American Bar Association’s Consumer Financial
Services Committee. Sharett is also a former fellow with the Leadership Counsel on
Legal Diversity (LCLD) and currently serves in a leadership role with LCLD.
Sharett holds a J.D. from The Ohio State University, Moritz College of Law and a B.S.
from Ball State University. He speaks nationally on financial services issues, among
other topics.
Keesha Warmsby is an associate in the Financial Services
Group at BakerHostetler’s Columbus office. She focuses
her practice on complex commercial litigation and
regulatory compliance, primarily representing financial
services companies. Working in an industry that is
constantly in flux, Keesha places high value on thorough
comprehension of her clients’ needs and assists in navigation through the legal and
regulatory environment in which her clients operate.
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3. Keesha’s experience includes counseling banks and other financial institutions,
including mortgage and auto lenders. She has assisted in compliance matters, class
actions, regulatory proceedings, licensing issues, and complex litigation.
She is a member of the Business Law Section and Consumer Financial Services
Committee of the American Bar Association, and the Banking, Commercial and
Bankruptcy Law Committee of the Ohio State Bar Association. She is a graduate of the
Barrister Leadership Program of the Columbus Bar Association and served as co-chair
of the Professional Development Committee of the John Mercer Langston Bar
Association.
Keesha earned her J.D. from Ohio Northern University, and she also holds a B.A. in
Business Administration, summa cum laude, from Kennesaw State University. She is
admitted to practice in U.S. District Court, Southern District of Ohio, and the State of
Ohio.
Is one of the nation's largest law firms,
representing clients around the globe. With
offices coast to coast, our more than 900
lawyers litigate cases and resolve disputes that potentially threaten clients'
competitiveness, navigate the laws and regulations that shape the global economy, and
help clients develop and close deals that fuel their strategic growth.
BakerHostetler has five core practice groups: Litigation, Business, Employment,
Intellectual Property, and Tax. Within these groups are several large specialty practices,
including antitrust, bankruptcy, healthcare, energy, middle market mergers and
acquisitions, complex commercial litigation, data privacy and security, patent prosecution
and international tax. BakerHostetler attorneys have broad knowledge and experience in
many industries, including energy, media, manufacturing, healthcare, financial services
and insurance, consumer products, and hospitality.
BakerHostetler distinguishes itself through its commitment to the highest standard of
client care. By emphasizing an approach to service delivery as exacting as its legal work,
it is determined to surpass client expectations.
The firm was founded on three core principles: to develop and sustain mutually beneficial,
long-term relationships with each of its clients; to provide timely, responsive, and high
quality legal services; and to be generous with both time and money to the communities
where we work. The firm consistently nurtures a collegial approach among our lawyers,
assuring effective teamwork in handling client work, while maintaining a culture of
providing exceptional legal counsel with a clear focus on value. BakerHostetler is
committed to the continuous development of our people and of the resources essential to
delivering effective and distinctive legal services worldwide.
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4. Kristin Messerli is the President and Founder of Cultural Outreach
Solutions, specializing in helping companies in the mortgage industry
better reach and serve multicultural homebuyers. Her expertise is in
multicultural marketing, Millennial homeownership, and compliance with
diversity regulations in the Dodd-Frank. She is also a consultant with the
National Association of Hispanic Real Estate Professionals (NAHREP)
Consulting Services.
Kristin is a frequent speaker at national conferences in the industry and has written for
numerous publications including Mortgage Banking and Mortgage Compliance
Magazine.
Kristin started her career in the mortgage industry and later worked as a social worker
both locally and abroad and trained providers on culturally competent practice. Prior to
starting her own business, she consulted with former McKinsey consultants at the Center
for the Creation of Economic Wealth to develop social enterprises, including developing
a business plan, financial model, and product design to support refugee women in
Palestine.
Kristin is fluent in Spanish and sits on the board for the Oklahoma Center for
Community and Justice. She holds her Master’s in Public Administration from the
University of Oklahoma.
Provides comprehensive solutions to compliance
and diversity & inclusion standards in the Dodd-
Frank Act, section 342. With a specialized team of
policy and legal experts, it performs compliance assessments and develops
strategic plans with personalized recommendations. It also helps companies with
implementations.
Additionally, it helps companies improve their communication and service across cultures.
It achieves this through training on reaching emerging market segments, improving
company culture, recruitment and marketing strategy. The Cultural Outreach Solutions
team consists of cross-cultural marketing experts and lifelong leaders in the mortgage
industry.
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5. COPYRIGHT ©2016 Baker Hostetler LLP. This book is being provided to you with a
limited license for use solely within your organization. This book, its content and the link
to it may be accessed by up to fifteen (15) members of your organization for each such
person’s internal use of the materials. However, these materials may not be downloaded,
reproduced, forwarded, or otherwise distributed in any form or by any means outside of
your organization. Your organization will however, be entitled to comply with a subpoena
or other validly issued administrative or judicial process that may request information from
the book, to the extent required by law. Unauthorized reproduction, forwarding,
distribution or display of this copyrighted work is subject to criminal and civil penalties
under federal law. For information about extending this license to additional members of
your organization, please contact:
David Upbin
Associate Vice President, Education Operations & Programming, & MBA Strategy
Mortgage Bankers Association
1919 M Street, NW
Washington, DC 20036
(202) 557-2931
www.mba.org
If you would like to order additional copies of this publication or would like to inquire
regarding discounts for quantity purchases, please contact MBA at education@mba.org.
DISCLAIMER
PLEASE TAKE NOTE: These materials have been produced by Baker Hostetler LLP.
These materials provide an overview of some of Section 342 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010. These materials are designed to
provide the reader with a general overview and understanding of the Section 342. These
materials are not intended to and do not provide legal advice, and does not create an
attorney-client relationship between the firm of Baker Hostetler LLP and the recipient. The
Section 342 provisions described herein are, in many instances, paraphrased, and a
careful reading of the relevant laws, regulations or cases thereunder may reveal
exceptions or different interpretations that might be applicable to a particular set of facts.
These materials cover areas in which the proper interpretation of law and regulation can
be highly dependent upon particular facts. Accordingly, taking action simply upon the
basis of information provided in these materials is not advisable. The materials are not a
substitute for consultation with qualified legal counsel regarding the manner in which the
laws and regulations referenced herein may be interpreted and apply to particular facts
or to particular business models. These materials are for informational and educational
purposes only, and are not a solicitation and should not be construed as such.
©2016 Baker Hostetler LLP
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6. Contents
INTRODUCTION............................................................................................................. 1
SCOPE............................................................................................................................ 2
STATUTORY AND REGULATORY BACKGROUND...................................................... 2
DEFINITIONS ................................................................................................................. 3
OVERVIEW AND SCOPE............................................................................................... 4
ENFORCEMENT ............................................................................................................ 5
JOINT STANDARDS IN DEPTH ..................................................................................... 6
1. Organizational Commitment to Diversity and Inclusion.............................. 6
2. Workforce Profile and Employment Practices............................................ 7
3. Procurement and Business Practices – Supplier Diversity ........................ 9
4. Practices to Promote Transparency of Organizational Diversity and
Inclusion................................................................................................... 10
5. Entity’s Self-Assessment ......................................................................... 11
USE OF INFORMATION BY AGENCIES...................................................................... 12
APPENDIX A MODEL POLICIES AND PROCEDURES FOR MODEL
ASSESSMENT................................................................................................... 13
INTRODUCTION................................................................................................ 13
SCOPE AND PURPOSE OF POLICIES AND PROCEDURES.......................... 13
Scope ...................................................................................................... 13
Purpose ................................................................................................... 14
ORGANIZATIONAL COMMITMENT TO DIVERSITY ........................................ 15
Leadership............................................................................................... 15
Strategies & Goals................................................................................... 15
Planning, Data Collection, and Self-Assessment..................................... 16
Implementation and Mid-Transitional Assessment ............................................. 17
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7. HIRING AND RETENTION................................................................................. 18
Hiring ...................................................................................................... 18
Retention ................................................................................................. 20
SUPPLIER DIVERSITY AND PROCUREMENT BUSINESS PRACTICES........ 22
Item 1 – Strategic Policy Creation And Board/Management Support ...... 22
Item 2 – Development Of A Supplier Diversity Action Plan...................... 24
Item 3 – Establish a Comprehensive Internal and External
Communication Plan..................................................................... 25
Item 4 – Increasing Opportunities for Target Groups............................... 26
Item 5 – Establish Supplier Development Processes .............................. 26
Item 6 – Tracking and Measuring Success.............................................. 27
PRACTICES TO PROMOTE TRANSPARENCY OF ORGANIZATIONAL
DIVERSITY AND INCLUSION................................................................. 28
Transparency Overview........................................................................... 28
Transparency Defined.............................................................................. 28
Information to be Disclosed ..................................................................... 28
Methods of Disclosure ............................................................................. 29
Self-Assessment................................................................................................. 30
APPENDIX B: SELF-ASSESSMENT ............................................................................ 31
Qualitative Self-Assessment............................................................................... 31
Self-Assessment: Quantitative Analysis ............................................................. 36
Self-Assessment Action Plan.............................................................................. 43
Publication of a Diversity and Inclusion Strategic Plan....................................... 56
Self-Assessment Disclosure to Agencies ........................................................... 59
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8. 1
INTRODUCTION
One June 10, 2015, 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”), Consumer
Financial Protection Bureau (“CFPB”), and Securities and Exchange Commission (“SEC”)
(each an “Agency” and collectively, the “Agencies”) issued a Final Interagency Policy
Statement Establishing Joint Standards For Assessing The Diversity Policies And
Practices of the entities they regulate (“Joint Standards”) as required by Section 342 of
the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank
Act”).1
Specifically, the Joint Standards was created by the Agencies’ respective Office of
Minority and Women Inclusion (“OMWI Office”). Section 342 directs each Agency to
establish an OMWI Office.2
Each OMWI Office is headed by a Director and is responsible
for all Agency matters relating to diversity in management, employment, and business
activities. Section 342(b)(2)(C) directs each Agency’s OMWI Director to develop
standards for assessing the diversity policies and practices of entities regulated by that
Agency.
The Joint Standards sets-forth five areas that a regulated entity may review in developing
its diversity policies and practices:
1. Organizational Commitment to Diversity and Inclusion;
2. Workplace Profile and Employment Practices;
3. Procurement and Business Practices;
4 Practices to Promote Transparency and Organizational Diversity and Inclusion;
and
5. Self-Assessment.3
These standards may be tailored to take into consideration a regulated entity’s size and
other characteristics (for example, total assets, number of employees, governance
structure, revenues, number of members and/or customers, contract volume, geographic
location, and community characteristics).
Neither Section 342 nor the Joint Standards requires regulated entities to disclose specific
information about its diversity policies and practices.4
Information that is disclosed,
1
80 Federal Register 33016 (June 10, 2015).
2
12 U.S.C. § 5452.
3
Federal Register at 33023.
4
Federal Register at 33024.
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9. 2
however, will be used by the Agencies to identify industry best practices where diversity
and inclusion practices are concerned.5
Unlike other Dodd-Frank provisions, Section 342 lacks any enforcement mechanism.
Indeed, the Joint Standards relies on: 1) a voluntary self-assessment by regulated
entities; 2) a voluntary disclosure of the self-assessment to the Joint Agencies; and 3) a
voluntary display of diversity information on the public websites. Critically, the Agencies
may not utilize their examination and supervisory authority in connection with these
standards.
SCOPE
This Guide sets forth a framework for regulated entities to use in creating a diversity and
inclusion program. Alternatively, this Guide may be used to alter a diversity and inclusion
program already in place.
Ideally, regulated entities will establish a diversity and inclusion program based on the
Joint Standards and incorporate the program with other diversity related requirements
such as those listed above.
This Guide only addresses the Joint Standards as regulated by the Agencies. Notably,
there are other laws pertaining to equal opportunity, government contracting standards,
and anti-discrimination laws that some regulated entities must also consider depending
on their size and other factors. Regulated entities must also consider the policies of
business partners and third party vendors as they complete the assessment and disclose
the results of those assessments.
Many of the requirements that are outlined in Section 342 deal with standards and
procedures that each Joint Agency must establish regarding the evaluation of contract
proposals for hiring service providers for the Joint Agencies.6
This Guide does not
address that aspect of Section 342.
STATUTORY AND REGULATORY BACKGROUND
Section 342 of the Dodd-Frank Act directed the establishment of an OMWI Office in each
Agency. Each OMWI Office is headed by a Director and is responsible for all Agency
matters relating to diversity in management, employment, and business activities.
Section 342 also directed each Agency’s OMWI Director to develop standards for
assessing the diversity policies and practices of entities regulated by that Agency.7
Accordingly, the Joint Standards is derived from this directive.
5
Id.
6
Id. at (e)-(f).
7
12 U.S.C. § 5452(c).
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10. 3
In developing the Joint Standards, the OMWI Directors and staff sought industry feedback
from depository institutions, holding companies, credit unions, and industry trade groups
regarding the challenges and successes of current diversity programs and policies.8
Additionally, the OMWI Directors held roundtable discussions with members of groups
representing financial services professionals, communities and consumer advocates.9
These meetings provided the Agencies with a greater understanding of the issues facing
minorities and women with respect to employment and business contracting opportunities
in the financial services industry.10
The resulting Joint Standards focuses primarily on institutions with more than 100
employees11
and applies only to an entity’s U.S. operations.12
However, this does not
preclude a multinational entity from also using the standards to more broadly assess their
organization. The “Agencies encourage each entity to use the standards in a manner
appropriate to its unique characteristics.”13
DEFINITIONS
The Joint Standards defines several key terms:
Minority. The term 'minority' means any Black American, Native American, Hispanic
American, or Asian American.14
Minority-owned Business.15
The term ‘minority-owned business’ means a business in
which more than 50% of the ownership or control of which is held by 1 or more minority
individuals and more than 50% of the net profit or loss of which accrues to 1 or more
minority individuals.
Women-owned Business.16
The term ‘women-owned business’ means a business in
which more than 50% of the ownership or control of which is held by 1 or more women,
more than 50% of the net profit or loss which accrues to 1 or more women, and a
significant percentage of senior management positions of which are held by women.
Inclusion. The Agencies define “inclusion” as a process to create and maintain a positive
work environment that values individual similarities and differences, so that all can reach
their potential and maximize their contributions to an organization.17
8
78 Federal Register at pg. 64054.
9
Id.
10
Id.
11
Id. at 33018.
12
Id.
13
Federal Register at pg. 33023.
14 12 U.S.C.S. § 5452(g)(3); 12 U.S.C.S. § 1811. Note, an entity may certainly broaden the definition of
“minority” as provided under the Joint Statement and FAQs to include persons from additional backgrounds
and communities.
15
12 U.S.C.S. § 5452(g)(4); 12 U.S.C.S. §1441A(r)(4)(A).
16
12 U.S.C.S. § 5452(g)(6); 12 U.S.C.S. §1441A(r)(4)(B).
17
80 Federal Register at 33022.
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11. 4
Diversity. The Agencies define “minorities” as Black Americans, Native Americans,
Hispanic Americans, and Asian Americans which is the same definition section 342(g) of
the Dodd-Frank Act.18
Regulated entities are permitted to use a broader definition of
“minorities” within their respective organizations.19
OVERVIEW AND SCOPE
The Agencies’ Joint Standards comprises the following five factors which can be used to
assess an entity’s commitment to diversity and inclusion:
1. Organizational Commitment to Diversity and Inclusion;
2. Workforce Profile and Employment Practices;
3. Procurement and Business Practices – Supplier Diversity;
4. Practices to Promote Transparency of Organizational Diversity and Inclusion; and
5. The Entity’s Self-Assessment.20
The goal of the Joint Standards is to provide a framework for regulated entities and to
promote transparency and awareness of diversity policies and practices within the entities
regulated by the Agencies.21
The purpose of the Joint Standards is to provide guidance
for assessing the diversity policies and practices of regulated entities.22
Moreover, the
Joint Standards is intended to facilitate transparence and awareness of the regulated
entities’ diversity policies and procedures for the public.23
According to the Agencies, a
robust diversity and inclusion program promotes stronger, more effective, and more
innovative businesses so that the company can serve a wider range of customers.24
The Agencies developed the Joint Standards by focusing on regulated entities with at
least 100 employees. 25
Smaller entities and/or those located in remote areas face unique
challenges and the Agencies encourage these entities to develop a Section 342 policy
that is tailored to their unique needs.26
Regulated entities with more than 100 employees or who are federal contractors with 50
or more employees and are prime contractors or first-tier subcontractors with contracts of
18
Id.
19
There is no definition of “Diversity” in the Joint Standards Policy. The Policy Statement states that diversity
refers to “minorities… and women” and that it “does not preclude an entity from using a broader definition
with regard to these standards.” Id.
20
Id. at 33023.
21
Id.
22
78 Federal Register at pg. 64054
23
Id.
24
Id.
25
80 Federal Register at pg. 33023.
26
Id.
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12. 5
$50,000 or more are required to file an Employer Information Report EEO-1 (“EEO-1
Report”) with the Equal Opportunity Commission.27
These reports are already helpful to
the extent that they contain data on employment diversity and can be of assistance in
assessing diversity policies and procedures.28
The Joint Standards only applies to a regulated entity’s U.S. operations.29
Notably, a
regulated entity may apply the Joint Standards more broadly for assessment purposes.30
ENFORCEMENT
Perhaps the most striking aspect of Section 342 is that it lacks any enforcement
mechanism.31
At the most, the Joint Standards provides an approach relying on voluntary
self-assessment by regulated entities, voluntary disclosure of these self-assessments to
the Agencies, and voluntary display of diversity information on public websites.32
Indeed,
they expressly provide that the “Agencies will not use their examination or supervisory
processes in connection with” the Joint Standards.33
Section 342 does not, however, prohibit the OMWIs from creating stronger assessment
standards than currently presented. Section 342(c)(1) states that “the Director of each
Office shall 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 woman-owned businesses in all business and activities of the agency…”34
The OMWI Directors will also continue to reach out to regulated entities and other
interested parties to discuss diversity and inclusion practices and methods of
assessment.35
Further, the Agencies will periodically review disclosed information to
determine industry best practices regarding diversity and inclusion.36
What the Joint Standards lacks in enforcement, they attempt to make up for by
emphasizing public accountability.37
Indeed, the fourth standard concerns transparency
of organizational diversity and inclusion efforts.38
The idea here appears to be that the
institutions that fail to incorporate diversity and inclusion policies and procedures will be
held accountable by the public which could result in individual consumers electing to take
their business elsewhere.
27
Id.
28
Id.
29
Id.
30
Id. at pg. 33018.
31
See gen. id. at 33016-24.
32
See id. at 33024.
33
(emphasis added.) Id. at 33022.
34
12 U.S.C. § 5452(c)(1).
35
80 Federal Register at 33024.
36
Id.
37
See gen. id.
38
Id.
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