Sometimes Congress gets it right. One of those times was in 2010, when it passed the Dodd-Frank financial reform law and included Section 342, which established the federal Offices of Minority and Women Inclusion (OMWIs) in the nation's most powerful financial regulatory agencies. Today there are real questions about whether we can maintain that forward momentum.
These offices matter. There is plenty of evidence that the subprime crash from which we are still recovering stemmed in large part from predatory loans marketed to communities of color, while regulators simply weren't paying attention to what happened in those communities.
The OMWI's job is to help make sure that doesn't happen again by diversifying the financial sector. Among other things, they set standards for workforce and supplier diversity for this multitrillion-dollar sector, ensuring that women and people of color are fully participating and benefiting from finance. Recent research from The Greenlining Institute and the NAACP revealed a shocking lack of both workforce and supplier diversity in the banking industry. In 2012, some of the top banks spent less than 6 percent of their total sourceable budgets with minority-owned businesses, and less than 20 percent of bank managers were people of color.
It's crucial that all stakeholders -- from Congress to agency leadership -- support the OMWIs in their mission and hold them accountable to the crucial goal of diversifying our financial system. But after three years since 20 OMWIs set up shop, we've seen the politics of the Beltway stall their progress rather than helping them move forward.
The OMWIs weren't given very specific authority or oversight, and so how internal agency leadership and structure support their mission is critical. Today, the internal politics of each agency shape each OMWI in terms of programming and data transparency.
Greenlining has analyzed the OMWI's Annual Reports to Congress -- which detail the offices' progress over the past year in diversifying their workforces and supplier networks -- since they were first published in 2011. The Annual Reports to Congress embody the commitment to diversity of each OMWI and its agency. We have seen great strides in the timeliness of published reports, a continued increase in data provided across the board, and a general uptick in contracting with diverse businesses -- particularly by the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. Unfortunately, other OMWIs seem stuck, with little progress to write home about.
Part of that stasis is lackluster data. Some agencies do a great deal of contracting with minority-owned businesses and some much less, and their reporting is all over the map. Some break down their data in great and useful detail, while others pile it all into a couple of indecipherable lumps. They can do better.
In order to make true progress, the OMWIs must be staffed by people who are able and willing to lead by example. They need the resources required to build up diversity programming, and must be dedicated to both transparency in metrics and to acknowledging and addressing disparities in a proactive fashion.
Some agencies have wholeheartedly embraced the OMWI process, setting an example others should follow. More active engagement from Congress can help the OMWIs increase their success.
Currently, the OMWIs' annual reports have very broad content requirements that leave much room for interpretation and variation. Congress should create a standardized, robust reporting template that allows apples-to-apples comparisons across agencies. One approach would be to establish an advisory committee of advocates and representatives from industry to craft these improved metrics -- creating robust measurements that push the agencies to be industry leaders, rather than simply fulfilling an obligation.
In addition, Congress must: ensure that annual reports continue to be available to the public; hold an annual, public hearing where OMWI directors and their agency heads report on diversity progress and challenges; and establish a special joint committee to address diversity within the federal government as a whole.
Members of Congress who doubt the importance of this should review both the history of our recent financial crisis as well as the growing pile of data on the increasing influence of voters of color.
Greenlining and the NAACP will be hosting an OMWI briefing on Capitol Hill on June 19 to educate Congressional staffers and community advocates on the OMWI's potential. To find out more about the event or the OMWIs in general, contact Danielle Beavers, Greenlining's Economic Equity Program Manager, at danielleb@greenlining.org.
Werblin is the Economic Equity Director for The Greenlining Institute; Asante - Muhammad is the senior director for the NAACP Economic Department.
This piece was originally published in The Hill.