The Consumer Financial Protection Bureau has spent a lot of time scouring lending data for evidence of "disparate impact." That's when the numbers show that creditors, intentionally or not, exhibit different treatment of customers according to race. It happens more often than you might think, and plenty of firms have racked up fair lending violations based on the statistics.

Well, wouldn'tcha know, it seems the CFPB has a disparate impact problem of its own. As reported recently by American Banker's Rachel Witkowski in Washington, recent job evaluation data used by the agency to determine raises and bonuses show significant disparities by race. White employees were twice as likely as their black co-workers to receive a "5," the highest grade. And fewer than a quarter of white employees received a "3," a mediocre score that went to more than a third of the Asians and Hispanics on staff and to 42% of black employees.

Jeb Hensarling wasted no time pouncing on the story, which also detailed employee complaints about their treatment more broadly at the agency. Within hours, the House Financial Services Committee chairman and two fellow GOP lawmakers had fired off a letter to the CFPB, probing for more details about its internal management practices.

It all made for pretty riveting political drama, but I was mainly thinking about the drama to come, as regulators refine a plan to require every bank, of any size and in any geography, to monitor its own performance on matters of diversity.

An interagency rule proposed last fall describes standards intended to help banks make self-assessments about their inclusion of minorities and women when it comes to hiring, awarding promotions and even entering into relationships with vendors. There's no suggestion (yet) that performance in these assessments would become part of the formal exam process, but it's clear banks will need to have measurements in place.

If you've been reading this column regularly, then you know that I'd be the first to make the case about the importance of diversity in business. And just to be clear, I'd expect any employer to provide fair treatment across color and gender lines.

The disparity in employee treatment that has turned up at the CFPB of all places makes me all the more convinced that in 2014, bias in the workplace is more common, and less obvious, than any of us might have realized. Clearly, with more self-assessment we can bring to light - and maybe even resolve - more such instances of workplace disparity.

However, I'm having an extremely hard time getting comfortable with the idea of government forcing private businesses to take up this type of initiative. Challenge? Sure. Suggest? Why not. But regulate? That's a very different story.

Effecting change sometimes means forcing the issue. Perhaps that's what drove Rep. Maxine Waters to push for the congressional mandates in Sec. 342 of the Dodd-Frank Act, which compels the regulators to propose rules on inclusion at banks. (The provision also required each regulatory agency to establish an Office of Minority and Women Inclusion and to monitor internal diversity efforts.)

I share the goal of making business more inclusive for women and minorities, and I believe self-assessment is a good way of getting there. But regulating along these lines feels to me like an overreach that will invite all kinds of unwanted tokenism. Perhaps regulators, cognizant of the challenges they themselves have faced in promoting this kind of consciousness-raising, will be sympathetic to the industry as they finalize their proposed rule.


Heather Landy, Editor in Chief

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