11 Jul 2010

Are Race and Gender Quotas Hidden in Dodd-Frank Financial Regulation Bill?

Diana Furchtgott-Roth (say that five times…) has dug up a real doosie, buried in the recesses of the financial regulation bill currently making its way through DC.

In a post over at Real Clear Politics, she finds that there is a section of the bill that “race and gender employment ratios, if not quotas, must be observed by private financial institutions that do business with the government”. Not only that, but this section would create some serious bureaucracy:

“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, the new Consumer Financial Protection Bureau…all would get their own Office of Minority and Women Inclusion.

What would be the mission of this new corps of Federal monitors? The Dodd-Frank bill sets it forth succinctly and simply – all too simply. The mission, it says, is to assure “to the maximum extent possible the fair inclusion” of women and minorities, individually and through businesses they own, in the activities of the agencies, including contracting.”

It’s hard to argue with these ideas in a general sense, or at least I should hope it would be. Fairness – more specifically the application of the principle of ‘Equal Justice Under Law’ (inscribed above the doors of the Supreme Court for a reason), in legal matters – should always be the goal on issues like this.

But the devil – as nearly always, when dealing with out-of-touch politicians – is in the details. In this case, there are two fundamental issues. The first is in the vague definition of what they mean by “fair inclusion”:

“How to define “fair” has bedeviled government administrators, university admissions officers, private employers, union shop stewards and all other supervisors since time immemorial – or at least since Congress first undertook to prohibit discrimination in employment.”

Equal justice under law cannot be reached with vague laws with so much leeway that they allow for discrimination to continue, but rather by looking for ways to fight discrimination of all kinds. Quotas, which the vagueness of this law may allow given past actions on this issue by government agencies, institutionalize discrimination. It is the responsibility of lawmakers to specify and justify what they wish to make into law.

The other issue here is the selective application of these rules on merely one area – another violation of ‘Equal Justice Under Law’:

“Lest there be any narrow interpretation of Congress’s intent, either by agencies or eventually by the courts, the bill specifies that the “fair” employment test shall apply to “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.” That last would appear to rope in law firms working for financial entities.”

This is likely just another example of some hyper-partisan congressperson or senator slipping something in a bill for some special interest, hoping that nobody who can decipher the meaning of a bill would actually read through the thing and bring enough attention to it to get it taken out.

In effect though, it sets this agency apart from others, putting it to a different standard than the law sets for all employers. If the Democrats think that the current employment law isn’t sufficient – something I would agree with (although we may part ways in potential solutions), they should bring it up in its own bill and try to pass a new law that fixes the problems for all employers – private and public.

What they shouldn’t do is treat one industry differently because they can get away with it, using legislative slight of hand, and treating one industry different than another… a clear violation of equal treatment under law. This is wrong in both directions – why should employees in one field have more rights than those in others?

Let’s hope they solve this, and make the bill stronger in other ways that would help our economy going forward, before passage.

Author Details
After a few years of blogging on other sites, Solomon launched ‘Rise of the Center’ – the precursor to Uniters.org, leading to a number of interviews and freelance opportunities, most notably covering the 2012 election cycle on WNYC.org – the website for the largest NPR station in the country, in New York City – and reported from the floor of the 2012 Democratic & Republican National Conventions. After a hiatus from politics, the horrific circus of the 2016 election, and more generally increasing extremism and corruption, brought him back to this project.
×
After a few years of blogging on other sites, Solomon launched ‘Rise of the Center’ – the precursor to Uniters.org, leading to a number of interviews and freelance opportunities, most notably covering the 2012 election cycle on WNYC.org – the website for the largest NPR station in the country, in New York City – and reported from the floor of the 2012 Democratic & Republican National Conventions. After a hiatus from politics, the horrific circus of the 2016 election, and more generally increasing extremism and corruption, brought him back to this project.
.

Leave a Reply