82 FR 14992 - Minority and Women Outreach Program

FEDERAL HOUSING FINANCE AGENCY

Federal Register Volume 82, Issue 56 (March 24, 2017)

Page Range		14992-14995
FR Document		2017-05894
The Federal Housing Finance Agency (FHFA) is prescribing this final rule to establish its minority and women outreach program (MWOP), pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA); the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (Safety and Soundness Act); and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2008 (Dodd-Frank Act). This final rule also redesignates the current Minority and Women Inclusion (MWI) regulation (``Minority and Women Inclusion Final Rule,'' ``MWI Rule,'' or ``2010 Final Rule''), in the Code of Federal Regulations to subchapter B of FHFA's regulations.
Federal Register, Volume 82 Issue 56 (Friday, March 24, 2017)
[Federal Register Volume 82, Number 56 (Friday, March 24, 2017)]
[Rules and Regulations]
[Pages 14992-14995]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-05894]


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FEDERAL HOUSING FINANCE AGENCY

12 CFR Parts 1207 and 1223

RIN 2590-AA87


Minority and Women Outreach Program

AGENCY: Federal Housing Finance Agency.

ACTION: Final rule.

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SUMMARY: The Federal Housing Finance Agency (FHFA) is prescribing this 
final rule to establish its minority and women outreach program (MWOP), 
pursuant to the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 (FIRREA); the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (Safety and Soundness Act); 
and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 
2008 (Dodd-Frank Act). This final rule also redesignates the current 
Minority and Women Inclusion (MWI) regulation (``Minority and Women 
Inclusion Final Rule,'' ``MWI Rule,'' or ``2010 Final Rule''), in the 
Code of Federal Regulations to subchapter B of FHFA's regulations.

DATES: Effective date: March 24, 2017. For additional information, see 
SUPPLEMENTARY INFORMATION.

FOR FURTHER INFORMATION CONTACT: Sharron Levine, Director, Office of 
Minority and Women Inclusion, [email protected], (202) 649-3496; 
or Eric Howard, Deputy Director, Office of Minority and Women 
Inclusion, [email protected], (202) 649-3009; or James Jordan, 
Assistant General Counsel, [email protected], (202) 649-3075 (not 
toll-free numbers), Federal Housing Finance Agency, 400 Seventh Street 
SW., Washington, DC 20219. The telephone number for the 
Telecommunications Device for the Hearing Impaired is (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

A. HERA and FIRREA (July 2008)

    In 2008, the Housing and Economic Recovery Act (HERA) \1\ amended 
the Safety and Soundness Act to require FHFA to ``take affirmative 
steps to seek diversity in its workforce, at all levels of the agency, 
consistent with the demographic diversity of the United States.'' \2\
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    \1\ Public Law 110-289, 122 Stat. 2654 (2008).
    \2\ Public Law 110-289, div. A, title I, sec. 1116(f), 122 Stat. 
2681. 12 U.S.C. 4520(f).
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    HERA also amended FIRREA \3\ to add FHFA to a list of agencies 
required to ``prescribe regulations to establish and oversee a minority 
outreach program within [the agency] to ensure inclusion, to the 
maximum extent possible, of minorities and women, and entities owned by 
minorities and women, including financial institutions, investment 
banking firms, underwriters, accountants, and providers of legal 
services, in all contracts entered into by the agency with such persons 
or entities, public and private, in order to manage the institutions 
and their assets for which the agency is responsible or to perform such 
other functions authorized under any law applicable to such agency.'' 
\4\
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    \3\ Public Law 101-73, 103 Stat. 183 (1989).
    \4\ Public Law 110-289, div. A, title II, sec 1216(c), 122 Stat. 
2792. 12 U.S.C. 1833e(c).
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B. Subpart B of 2010 NPR (March 2010)

    In January 2010, FHFA published a Notice of Proposed Rulemaking on 
Minority and Women Inclusion (2010 NPRM) \5\ to implement HERA's MWI 
mandates. The 2010 NPRM Subparts A and C addressed the establishment 
and supervision of Office[s] of Minority and Women Inclusion (OMWIs) at 
the Federal National Mortgage Association (Fannie Mae), the Federal 
Home Loan Corporation (Freddie Mac), and the Federal Home Loan Banks 
(FHLBs) (collectively, ``FHFA's regulated entities''), as well as, the 
Federal Home Loan Banks' Office of Finance.
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    \5\ ``Minority and Women Inclusion; Notice of Proposed 
Rulemaking,'' 75 FR 1289 (January 11, 2010).
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    The 2010 NPRM Subpart B addressed internal operations. Subpart B: 
(1) Outlined affirmative steps FHFA would take to promote diversity in 
its own workforce (as required by the HERA amendments to the Safety and 
Soundness Act); and (2) Established an FHFA outreach program regulation 
(as required by the HERA amendments to FIRREA).

C. Dodd-Frank Act, 2010 Final Rule (July 2010-December 2010)

    On July 21, 2010, after FHFA published the 2010 NPRM, but before 
the rule was finalized, Dodd-Frank Act \6\ was enacted. Dodd-Frank Act 
section 342 required FHFA and several other agencies to ``develop 
[internal] standards'' that address equal employment opportunity (EEO) 
and increased participation of minority-owned and women-owned business 
in the programs and contracts of the respective agency.\7\
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    \6\ Public Law 111-203, 124 Stat. 1376 (2010).
    \7\ The Dodd-Frank Act imposed MWI requirements on the internal 
operations of the following agencies and entities: The Consumer 
Financial Protection Bureau (CFPB), Federal Deposit Insurance 
Corporation (FDIC), FHFA, Federal Reserve Board (FRB), each of the 
Federal Reserve Banks, National Credit Union Administration (NCUA), 
Office of the Comptroller of the Currency (OCC), Securities and 
Exchange Commission (SEC), and the Department of Treasury.
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    FHFA was specially situated. As the only agency subject to HERA's 
Minority and Women Inclusion (MWI) requirements, FHFA already had 
published the 2010 NPRM Subpart B which, if adopted, would have 
fulfilled both its obligations under HERA, and, the newly established 
Dodd-Frank Act section 342.
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    \7\ 12 U.S.C. 5452.
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    However, in December 2010, FHFA finalized its 2010 NPRM without 
adopting proposed Subpart B.\8\ In the preamble to the 2010 Final Rule, 
FHFA committed to finalize Subpart B, but not until the other agencies 
subject to Dodd-Frank Act section 342 began work on implementation, and 
FHFA ensured that its proposal aligned with the other agencies' 
practices.
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    \8\ ``Minority and Women Inclusion; Final Rule,'' 75 FR 81395 
(December 28, 2010) (codified at 12 CFR 1207).
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    The other agencies subsequently established their respective OMWIs, 
and, along with FHFA's OMWI, implemented Dodd-Frank Act section 342. 
FHFA drafted internal EEO standards in August, 2016. However, FHFA did 
not adopt the standards in a formal rulemaking, nor did FHFA fulfill 
the promise in its 2010 Final Rule to revisit and finalize Subpart B.

D. FIRREA Requirement To Prescribe Regulations (Current State)

    The Federal Deposit Insurance Corporation (FDIC), FHFA, and Office 
of the Comptroller of the Currency (OCC) hold a special status among 
the agencies subject to Dodd-Frank Act section 342. The FDIC, FHFA, and 
OCC are the only agencies also subject to the FIRREA section 1216 (12 
U.S.C. 1833e) requirement to ``prescribe regulations'' to establish a 
minority outreach program (the other agencies subject to Dodd-Frank Act 
section 342 simply were required to develop and implement the less 
formal ``standards'' referenced above). The FDIC and OCC were the 
original subjects of FIRREA section 1216's (12 U.S.C. 1833e) regulation 
requirement when FIRREA was enacted in 1989. Accordingly, both agencies

[[Page 14993]]

published regulations establishing minority outreach programs prior to 
HERA, thus leaving FHFA as the only agency yet to fulfill the FIRREA 
mandate section 1216 (12 U.S.C. 1833e).^{9 10}
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    \9\ FDIC Minority and Outreach Program--Contracting, 12 CFR part 
361, and OCC Description of Office, Procedures, Public Information; 
Minority, Women and Individuals with Disabilities-Owned Business; 
Contracting Outreach Program, 12 CFR part 4, subpart D.
    \10\ Since HERA's enactment, the FDIC made a technical amendment 
to its existing rule by changing the name of the office that 
oversees the FDIC's outreach program from the ``Office of Diversity 
and Economic Opportunity (ODEO)'' to the ``Office of Minority and 
Women Inclusion (OMWI).'' The OCC made no changes to its existing 
regulation.
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II. Final Rule

    Administratively, the final rule: (a) Fulfills FHFA's obligation to 
``prescribe regulations'' establishing an outreach program in 
accordance with FIRREA, thereby aligning FHFA's regulations with the 
FDIC and OCC's existing regulations; (b) formalizes FHFA's commitment 
to EEO by rule; and (c) fulfills FHFA's commitment in the final rule to 
revisit and finalize the substance of proposed Subpart B.
    The final rule also demonstrates FHFA's commitment to diversity and 
inclusion and provides a baseline for implementing diversity and 
inclusion throughout every level of the agency.
    The final rule is modeled on the existing FDIC Minority and Women 
Outreach Program rule (FDIC Rule) \11\ which is similar in substance to 
the OCC's Minority, Women, and Individuals with Disabilities-Owned 
Business Contracting Outreach Program rule (OCC Rule).\12\ The FDIC 
drafted its original rule in 1990 and amended it multiple times to 
conform the rule to Supreme Court decisions on affirmative action that 
bore upon the rule's substance. FHFA drew heavily on the work done by 
the FDIC.
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    \11\ FDIC Minority and Women Outreach Program, 12 CFR part 361.
    \12\ OCC Description of Office, Procedures, Public Information; 
Minority, Women and Individuals with Disabilities-Owned Business; 
Contracting Outreach Program, 12 CFR part 4, subpart D.
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A. Final Rule and the Administrative Procedure Act (APA)

    In the preamble to the 2010 Final Rule, FHFA noted that it reserved 
Subpart B of its broader Minority and Women Inclusion Rule to address 
the MWI-related statutory requirements aimed at FHFA's internal 
policies. Since then, the 2010 Final Rule has evolved,\13\ and FHFA has 
concluded that, as an administrative matter, a new regulation under 
subchapter A of FHFA's regulations is necessary for the internally 
applied requirements. FHFA determined that separating FHFA's internal 
requirements from the requirements that the 2010 Final Rule imposes 
upon FHFA's regulated entities would be more orderly than an amendment 
to the existing Minority and Women Inclusion regulation.
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    \13\ The 2010 Final Rule was amended to add regulated entity 
board diversity requirements, 80 FR 25209 (May 4, 2015), and a 
Notice of Proposed Rulemaking is currently out for comment to amend 
the 2010 Final Rule again to require FHFA's regulated entities to 
engage in diversity and inclusion strategic planning, 81 FR 74730 
(October 27, 2016).
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    This final rule also redesignates the current MWI regulation as 
part 1223 of title 12 of the Code of Federal Regulations and the new 
MWOP regulation as part 1207 in order to keep all FHFA regulations 
related to FHFA's Organization & Operations in subchapter A, and those 
regulations related to Regulated Entities in subchapter B. There are no 
substantive changes to the MWI regulation. Thus, the newly designated 
part 1207 renders the reserved portion of former subpart B for the MWOP 
rule unnecessary, however FHFA continues to reserve this subpart for 
future rulemakings.
    Under the APA, prior notice and comment periods are not required if 
a rule relates to ``a matter of agency management or personnel or to 
public property, loans, grants, benefits, or contracts.'' Therefore, 
this final rule is effective upon publication in the Federal Register.

III. Section-by-Section Analysis

Definitions (Sec.  1207.1)

    This establishes that the terms used in the final rule have the 
same meaning as in FHFA's Minority and Women Inclusion Regulation at 12 
CFR part 1223.

FHFA Workforce Diversity; Equal Employment Opportunity Program (Sec.  
1207.2)

    Section 1207.2(b) states that FHFA will comply with EEOC 
requirements for Federal agencies. The purpose of that explicit 
statement is to memorialize FHFA's fulfillment of Dodd-Frank Act's 
section 342 requirement to ``establish standards'' in a formal 
rulemaking (FHFA has already drafted standards internally, and, in 
practice, FHFA already meets the EEOC's requirements).
    Section 1207.2(c) states FHFA's policy on non-discrimination. The 
language in that subsection incorporates provisions from a series of 
EEO-related Executive Orders (E.O.s) that already applied to FHFA by 
statute. Restating the provisions explicitly in this subsection 
confirms for the reader that FHFA conforms to these specific E.O.s.
    Section 1207.2(d) lists the ``affirmative steps'' FHFA will take to 
promote diversity in hiring, including recruiting at institutions that 
serve primarily minorities or women, and, placing advertisements in 
media oriented toward minorities and women. The language in this 
subsection is drawn from HERA.\14\
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    \14\ Public Law 110-289, sec. 1124(f).
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FHFA Contracting and Diversity and Inclusion (Sec.  1207.3)

    Section 1207.3(a) states that FHFA's OMWI has overall 
responsibility for diversity and inclusion in FHFA contracting.
    Dodd-Frank Act's section 342 requires that FHFA develop standards 
for technical assistance, but there is no statutory requirement that 
FHFA prescribe a regulation committing to provide technical assistance. 
FHFA nevertheless included this provision in Sec.  1207.3(c) of the 
final rule to demonstrate FHFA's commitment to diversity and inclusion 
and because including this provision in the final rule provides a 
central point of reference for potential FHFA vendors.
    Section 1207.3(b) begins with a statement that FHFA's policy is to 
promote diversity in the contracting process. The subsection then 
provides a non-exclusive list of activities FHFA may engage in to 
promote diversity, including participating in conventions intended to 
promote business opportunities for minority- and women-owned 
businesses. Like the technical assistance provision, the list of 
potential activities is extracted from Dodd-Frank Act section 342.
    Section 1207.3(d) provides that FHFA's OMWI will monitor that FHFA 
staff interfacing with the contracting community are actively promoting 
FHFA's Outreach Program. FDIC's OMWI established this same construct 
for the FDIC rule and Outreach Program with reported success.

Limitations (Sec.  1207.4)

    This section establishes that the final rule does not create any 
right or benefit for any party against the United States, its 
departments, agencies, or entities, its officers, employees, or agents. 
This section forecloses any theory that the final rule subjects FHFA to 
any new legal liability.

[[Page 14994]]

IV. Consideration of Differences Between the Banks and the Enterprises

    Section 1313(f) of the Safety and Soundness Act, as amended by 
section 1201 of HERA, requires the Director, when promulgating 
regulations relating to the Banks, to consider the differences between 
the Banks and the Enterprises with respect to the Banks' cooperative 
ownership structure; mission of providing liquidity to members; 
affordable housing and community development mission; capital 
structure; and joint and several liability. In preparing this final 
rule, the Director considered the differences between the Banks and the 
Enterprises with respect to the final rule's impact and the differences 
outlined in section 1313(f) and determined that the final rule would 
not adversely impact the FHLBanks or Enterprises.

V. Paperwork Reduction Act

    The final rule does not contain any collection of information 
pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.). Therefore, FHFA has not submitted any information to the Office 
of Management and Budget for review.

VI. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that 
a regulation that has a significant economic impact on a substantial 
number of small entities, including small businesses and or small 
organizations, must include an initial regulatory flexibility analysis 
describing the regulation's impact on small entities. Such an analysis 
need not be undertaken if the agency has certified that the regulation 
will not have a significant economic impact on a substantial number of 
small entities. FHFA has considered the impact of the proposed rule 
under the Regulatory Flexibility Act. The General Counsel of FHFA 
certifies that the final rule, is not likely to have a significant 
economic impact on a substantial number of small entities, because the 
regulation merely fulfills statutory requirements that FHFA: (1) 
``develop standards'' that apply internally; and (2) ``prescribe[s] 
regulations'' establishing FHFA's own outreach program.

List of Subjects

12 CFR Part 1207

    Discrimination, Diversity, Equal employment opportunity, Government 
contracts, Minority businesses, Outreach.

12 CFR Part 1223

    Discrimination, Diversity, Equal employment opportunity, Government 
contracts, Minority businesses, Outreach.

Authority and Issuance

    Accordingly, for the reasons stated in the SUPPLEMENTARY 
INFORMATION, and under the authority of 12 U.S.C. 4520 and 4526, 12 
U.S.C. 1833e, and E.O. 11478, FHFA is amending subchapters A and B of 
chapter XII of title 12, Code of Federal Regulations as follows:

PART 1207--MINORITY AND WOMEN INCLUSION

0
1. The authority citation for part 1207 continues to read as follows:

    Authority: 12 U.S.C. 4520 and 4526; 12 U.S.C. 1833e; E.O. 11478.

PART 1207--[REDESIGNATED AS PART 1223]

0
2. Redesignate part 1207 as part 1223 and transfer to subchapter B.

PART 1223--MINORITY AND WOMEN INCLUSION

Subpart B--[Removed and Reserved]

0
3. Remove and reserve subpart B (consisting of Sec. Sec.  1223.10-
1223.19).

0
4. Add new part 1207 to subchapter A to read as follows:

PART 1207--MINORITY AND WOMEN OUTREACH PROGRAM

Sec.
1207.1 Definitions.
1207.2 FHFA workforce diversity; Equal Employment Opportunity 
Program.
1207.3 FHFA contracting and diversity and inclusion.
1207.4 Limitations.

    Authority: 12 U.S.C. 4520 and 4526; 12 U.S.C. 1833e; E.O. 11478.


Sec.  1207.1  Definitions.

    The terms in this part have the same meaning as in FHFA's Minority 
and Women Inclusion Regulation at part 1223 of this chapter, as may be 
amended from time to time.


Sec.  1207.2  FHFA workforce diversity; Equal Employment Opportunity 
Program.

    (a) Responsibility. FHFA's Office of Minority and Women Inclusion 
(OMWI) shall have overall responsibility for diversity and inclusion in 
FHFA's employment practices.
    (b) General. FHFA shall maintain an Equal Employment Opportunity 
(EEO) program consistent with the Equal Employment Opportunity 
Commission requirements for Federal agencies and Executive Order 11478.
    (c) Workforce diversity. FHFA shall not discriminate in employment 
against any person because of race, color, religion, national origin, 
sex, age, genetic information, disability, sexual orientation, gender 
identity, or status as a parent.
    (d) Affirmative steps for workforce diversity. FHFA shall take 
affirmative steps to seek diversity in its workforce, at all levels of 
the agency, in a manner consistent with applicable law. Such steps 
shall include:
    (1) Recruiting at historically Black colleges and universities, 
Hispanic-serving institutions, women's colleges, and colleges that 
typically serve the individuals with disabilities and majority minority 
populations;
    (2) Sponsoring and recruiting at job fairs in urban communities;
    (3) Placing employment advertisements in media oriented toward 
minorities and women;
    (4) Partnering with organizations that are focused on developing 
opportunities for minorities and women to place talented minorities and 
women in industry internships, summer employment, and full-time 
positions; and
    (5) Where feasible, partnering with inner-city high schools, girls' 
high schools, and high schools with majority minority populations, to 
establish or enhance financial literacy and provide mentoring.


Sec.  1207.3   FHFA contracting and diversity and inclusion.

    (a) Responsibilities. FHFA's Office of Minority and Women Inclusion 
(OMWI) shall have responsibility for diversity and inclusion in FHFA's 
contracting practices.
    (b) Outreach. FHFA's policy is to promote diversity in its 
contracting process. FHFA shall establish a contractor outreach program 
intended to ensure that minority- and women-owned businesses are made 
aware of and given the opportunity to compete for contracts with FHFA. 
FHFA shall conduct outreach activities that may include, but are not 
limited to:
    (1) Identifying contractors that are minority- and women-owned by 
obtaining lists and directories maintained by government agencies, 
trade groups, and other organizations;
    (2) Advertising contract opportunities through media targeted to 
reach potential contractors that are minority- and women-owned; and
    (3) Participating in events such as conventions, trade shows, 
seminars, professional meetings, and other

[[Page 14995]]

gatherings intended to promote business opportunities for minority- and 
women-owned businesses.
    (c) Technical assistance. FHFA shall provide technical assistance 
and guidance to facilitate the identification and solicitation of 
minority and women-owned businesses.
    (d) Monitoring. FHFA's OMWI shall monitor that FHFA staff 
interfacing with the contracting community are knowledgeable about, and 
actively promoting, FHFA's Outreach program.


Sec.  1207.4   Limitations.

    The regulations in this part do not, are not intended to, and 
should not be construed to create any right or benefit, substantive or 
procedural, enforceable at law, in equity, or through administrative 
proceeding, by any party against FHFA, the United States, its other 
departments, agencies, or entities, its officers, employees, or agents.

     Dated: March 20, 2017.
Melvin L. Watt,
Director, Federal Housing Finance Agency.
[FR Doc. 2017-05894 Filed 3-23-17; 8:45 am]
 BILLING CODE 8070-01-P
14992 Federal Register / Vol. 82, No. 56 / Friday, March 24, 2017 / Rules and Regulations

For the Nuclear Regulatory Commission. diversity in its workforce, at all levels of employment opportunity (EEO) and
Victor M. McCree, the agency, consistent with the increased participation of minority-
Executive Director for Operations. demographic diversity of the United owned and women-owned business in
[FR Doc. 2017–05902 Filed 3–23–17; 8:45 am] States.’’ 2 the programs and contracts of the
BILLING CODE 7590–01–P
HERA also amended FIRREA 3 to add respective agency.7
FHFA to a list of agencies required to FHFA was specially situated. As the
‘‘prescribe regulations to establish and only agency subject to HERA’s Minority
FEDERAL HOUSING FINANCE oversee a minority outreach program and Women Inclusion (MWI)
AGENCY within [the agency] to ensure inclusion, requirements, FHFA already had
to the maximum extent possible, of published the 2010 NPRM Subpart B
12 CFR Parts 1207 and 1223 minorities and women, and entities which, if adopted, would have fulfilled
owned by minorities and women, both its obligations under HERA, and,
RIN 2590–AA87 including financial institutions, the newly established Dodd-Frank Act
Minority and Women Outreach investment banking firms, underwriters, section 342.
Program accountants, and providers of legal However, in December 2010, FHFA
services, in all contracts entered into by finalized its 2010 NPRM without
AGENCY: Federal Housing Finance the agency with such persons or adopting proposed Subpart B.8 In the
Agency. entities, public and private, in order to preamble to the 2010 Final Rule, FHFA
ACTION: Final rule. manage the institutions and their assets committed to finalize Subpart B, but not
for which the agency is responsible or until the other agencies subject to Dodd-
SUMMARY: The Federal Housing Finance to perform such other functions Frank Act section 342 began work on
Agency (FHFA) is prescribing this final authorized under any law applicable to implementation, and FHFA ensured that
rule to establish its minority and women such agency.’’ 4 its proposal aligned with the other
outreach program (MWOP), pursuant to agencies’ practices.
the Financial Institutions Reform, B. Subpart B of 2010 NPR (March 2010) The other agencies subsequently
Recovery, and Enforcement Act of 1989 In January 2010, FHFA published a established their respective OMWIs,
(FIRREA); the Federal Housing Notice of Proposed Rulemaking on and, along with FHFA’s OMWI,
Enterprises Financial Safety and Minority and Women Inclusion (2010 implemented Dodd-Frank Act section
Soundness Act of 1992 (Safety and NPRM) 5 to implement HERA’s MWI 342. FHFA drafted internal EEO
Soundness Act); and the Dodd-Frank mandates. The 2010 NPRM Subparts A standards in August, 2016. However,
Wall Street Reform and Consumer and C addressed the establishment and FHFA did not adopt the standards in a
Protection Act of 2008 (Dodd-Frank supervision of Office[s] of Minority and formal rulemaking, nor did FHFA fulfill
Act). This final rule also redesignates Women Inclusion (OMWIs) at the the promise in its 2010 Final Rule to
the current Minority and Women Federal National Mortgage Association revisit and finalize Subpart B.
Inclusion (MWI) regulation (‘‘Minority (Fannie Mae), the Federal Home Loan
and Women Inclusion Final Rule,’’ Corporation (Freddie Mac), and the D. FIRREA Requirement To Prescribe
‘‘MWI Rule,’’ or ‘‘2010 Final Rule’’), in Federal Home Loan Banks (FHLBs) Regulations (Current State)
the Code of Federal Regulations to (collectively, ‘‘FHFA’s regulated The Federal Deposit Insurance
subchapter B of FHFA’s regulations. entities’’), as well as, the Federal Home Corporation (FDIC), FHFA, and Office of
DATES: Effective date: March 24, 2017. Loan Banks’ Office of Finance. the Comptroller of the Currency (OCC)
For additional information, see The 2010 NPRM Subpart B addressed hold a special status among the agencies
SUPPLEMENTARY INFORMATION. internal operations. Subpart B: (1) subject to Dodd-Frank Act section 342.
FOR FURTHER INFORMATION CONTACT: Outlined affirmative steps FHFA would The FDIC, FHFA, and OCC are the only
Sharron Levine, Director, Office of take to promote diversity in its own agencies also subject to the FIRREA
Minority and Women Inclusion, workforce (as required by the HERA section 1216 (12 U.S.C. 1833e)
Sharron.Levine@fhfa.gov, (202) 649– amendments to the Safety and requirement to ‘‘prescribe regulations’’
3496; or Eric Howard, Deputy Director, Soundness Act); and (2) Established an to establish a minority outreach program
Office of Minority and Women FHFA outreach program regulation (as (the other agencies subject to Dodd-
Inclusion, Eric.Howard@fhfa.gov, (202) required by the HERA amendments to Frank Act section 342 simply were
649–3009; or James Jordan, Assistant FIRREA). required to develop and implement the
General Counsel, James.Jordan@ less formal ‘‘standards’’ referenced
C. Dodd-Frank Act, 2010 Final Rule
fhfa.gov, (202) 649–3075 (not toll-free above). The FDIC and OCC were the
(July 2010–December 2010)
numbers), Federal Housing Finance original subjects of FIRREA section
Agency, 400 Seventh Street SW., On July 21, 2010, after FHFA 1216’s (12 U.S.C. 1833e) regulation
Washington, DC 20219. The telephone published the 2010 NPRM, but before requirement when FIRREA was enacted
number for the Telecommunications the rule was finalized, Dodd-Frank Act 6 in 1989. Accordingly, both agencies
Device for the Hearing Impaired is (800) was enacted. Dodd-Frank Act section
877–8339. 342 required FHFA and several other 7 The Dodd-Frank Act imposed MWI

agencies to ‘‘develop [internal] requirements on the internal operations of the
SUPPLEMENTARY INFORMATION: following agencies and entities: The Consumer
standards’’ that address equal
Financial Protection Bureau (CFPB), Federal
I. Background Deposit Insurance Corporation (FDIC), FHFA,
2 Public Law 110–289, div. A, title I, sec. 1116(f),
Federal Reserve Board (FRB), each of the Federal
jstallworth on DSK7TPTVN1PROD with RULES

A. HERA and FIRREA (July 2008) 122 Stat. 2681. 12 U.S.C. 4520(f). Reserve Banks, National Credit Union
3 Public Law 101–73, 103 Stat. 183 (1989).
In 2008, the Housing and Economic Administration (NCUA), Office of the Comptroller
4 Public Law 110–289, div. A, title II, sec 1216(c), of the Currency (OCC), Securities and Exchange
Recovery Act (HERA) 1 amended the
122 Stat. 2792. 12 U.S.C. 1833e(c). Commission (SEC), and the Department of Treasury.
Safety and Soundness Act to require 5 ‘‘Minority and Women Inclusion; Notice of 7 12 U.S.C. 5452.
FHFA to ‘‘take affirmative steps to seek Proposed Rulemaking,’’ 75 FR 1289 (January 11, 8 ‘‘Minority and Women Inclusion; Final Rule,’’
2010). 75 FR 81395 (December 28, 2010) (codified at 12
1 Public Law 110–289, 122 Stat. 2654 (2008). 6 Public Law 111–203, 124 Stat. 1376 (2010). CFR 1207).

VerDate Sep<11>2014 16:20 Mar 23, 2017 Jkt 241001 PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 E:\FR\FM\24MRR1.SGM 24MRR1
Federal Register / Vol. 82, No. 56 / Friday, March 24, 2017 / Rules and Regulations 14993

published regulations establishing and FHFA has concluded that, as an the provisions explicitly in this
minority outreach programs prior to administrative matter, a new regulation subsection confirms for the reader that
HERA, thus leaving FHFA as the only under subchapter A of FHFA’s FHFA conforms to these specific E.O.s.
agency yet to fulfill the FIRREA regulations is necessary for the Section 1207.2(d) lists the
mandate section 1216 (12 U.S.C. internally applied requirements. FHFA ‘‘affirmative steps’’ FHFA will take to
1833e).9 10 determined that separating FHFA’s promote diversity in hiring, including
internal requirements from the
II. Final Rule recruiting at institutions that serve
requirements that the 2010 Final Rule
Administratively, the final rule: (a) primarily minorities or women, and,
imposes upon FHFA’s regulated entities
Fulfills FHFA’s obligation to ‘‘prescribe placing advertisements in media
would be more orderly than an
regulations’’ establishing an outreach amendment to the existing Minority and oriented toward minorities and women.
program in accordance with FIRREA, Women Inclusion regulation. The language in this subsection is
thereby aligning FHFA’s regulations This final rule also redesignates the drawn from HERA.14
with the FDIC and OCC’s existing current MWI regulation as part 1223 of FHFA Contracting and Diversity and
regulations; (b) formalizes FHFA’s title 12 of the Code of Federal Inclusion (§ 1207.3)
commitment to EEO by rule; and (c) Regulations and the new MWOP
fulfills FHFA’s commitment in the final regulation as part 1207 in order to keep Section 1207.3(a) states that FHFA’s
rule to revisit and finalize the substance all FHFA regulations related to FHFA’s OMWI has overall responsibility for
of proposed Subpart B. Organization & Operations in diversity and inclusion in FHFA
The final rule also demonstrates subchapter A, and those regulations contracting.
FHFA’s commitment to diversity and related to Regulated Entities in
inclusion and provides a baseline for Dodd-Frank Act’s section 342 requires
subchapter B. There are no substantive
implementing diversity and inclusion that FHFA develop standards for
changes to the MWI regulation. Thus,
throughout every level of the agency. technical assistance, but there is no
the newly designated part 1207 renders
The final rule is modeled on the statutory requirement that FHFA
the reserved portion of former subpart B
existing FDIC Minority and Women for the MWOP rule unnecessary, prescribe a regulation committing to
Outreach Program rule (FDIC Rule) 11 however FHFA continues to reserve this provide technical assistance. FHFA
which is similar in substance to the subpart for future rulemakings. nevertheless included this provision in
OCC’s Minority, Women, and Under the APA, prior notice and § 1207.3(c) of the final rule to
Individuals with Disabilities-Owned comment periods are not required if a demonstrate FHFA’s commitment to
Business Contracting Outreach Program rule relates to ‘‘a matter of agency diversity and inclusion and because
rule (OCC Rule).12 The FDIC drafted its management or personnel or to public including this provision in the final rule
original rule in 1990 and amended it property, loans, grants, benefits, or provides a central point of reference for
multiple times to conform the rule to contracts.’’ Therefore, this final rule is potential FHFA vendors.
Supreme Court decisions on affirmative effective upon publication in the Section 1207.3(b) begins with a
action that bore upon the rule’s Federal Register. statement that FHFA’s policy is to
substance. FHFA drew heavily on the promote diversity in the contracting
work done by the FDIC. III. Section-by-Section Analysis
process. The subsection then provides a
A. Final Rule and the Administrative Definitions (§ 1207.1) non-exclusive list of activities FHFA
Procedure Act (APA) This establishes that the terms used in may engage in to promote diversity,
In the preamble to the 2010 Final the final rule have the same meaning as including participating in conventions
Rule, FHFA noted that it reserved in FHFA’s Minority and Women intended to promote business
Subpart B of its broader Minority and Inclusion Regulation at 12 CFR part opportunities for minority- and women-
Women Inclusion Rule to address the 1223. owned businesses. Like the technical
MWI-related statutory requirements FHFA Workforce Diversity; Equal assistance provision, the list of potential
aimed at FHFA’s internal policies. Since Employment Opportunity Program activities is extracted from Dodd-Frank
then, the 2010 Final Rule has evolved,13 (§ 1207.2) Act section 342.
Section 1207.2(b) states that FHFA Section 1207.3(d) provides that
9 FDIC Minority and Outreach Program—
will comply with EEOC requirements FHFA’s OMWI will monitor that FHFA
Contracting, 12 CFR part 361, and OCC Description
of Office, Procedures, Public Information; Minority, for Federal agencies. The purpose of staff interfacing with the contracting
Women and Individuals with Disabilities-Owned that explicit statement is to memorialize community are actively promoting
Business; Contracting Outreach Program, 12 CFR FHFA’s fulfillment of Dodd-Frank Act’s FHFA’s Outreach Program. FDIC’s
part 4, subpart D. OMWI established this same construct
10 Since HERA’s enactment, the FDIC made a section 342 requirement to ‘‘establish
standards’’ in a formal rulemaking for the FDIC rule and Outreach Program
technical amendment to its existing rule by
changing the name of the office that oversees the (FHFA has already drafted standards with reported success.
FDIC’s outreach program from the ‘‘Office of internally, and, in practice, FHFA
Diversity and Economic Opportunity (ODEO)’’ to Limitations (§ 1207.4)
the ‘‘Office of Minority and Women Inclusion
already meets the EEOC’s requirements).
(OMWI).’’ The OCC made no changes to its existing Section 1207.2(c) states FHFA’s This section establishes that the final
regulation. policy on non-discrimination. The rule does not create any right or benefit
11 FDIC Minority and Women Outreach Program,
language in that subsection incorporates for any party against the United States,
12 CFR part 361.
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provisions from a series of EEO-related its departments, agencies, or entities, its
12 OCC Description of Office, Procedures, Public

Information; Minority, Women and Individuals
Executive Orders (E.O.s) that already officers, employees, or agents. This
with Disabilities-Owned Business; Contracting applied to FHFA by statute. Restating section forecloses any theory that the
Outreach Program, 12 CFR part 4, subpart D. final rule subjects FHFA to any new
13 The 2010 Final Rule was amended to add the 2010 Final Rule again to require FHFA’s legal liability.
regulated entity board diversity requirements, 80 FR regulated entities to engage in diversity and
25209 (May 4, 2015), and a Notice of Proposed inclusion strategic planning, 81 FR 74730 (October
Rulemaking is currently out for comment to amend 27, 2016). 14 Public Law 110–289, sec. 1124(f).

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14994 Federal Register / Vol. 82, No. 56 / Friday, March 24, 2017 / Rules and Regulations

IV. Consideration of Differences 12 CFR Part 1223 requirements for Federal agencies and
Between the Banks and the Enterprises Discrimination, Diversity, Equal Executive Order 11478.
(c) Workforce diversity. FHFA shall
Section 1313(f) of the Safety and employment opportunity, Government
not discriminate in employment against
Soundness Act, as amended by section contracts, Minority businesses,
any person because of race, color,
1201 of HERA, requires the Director, Outreach.
religion, national origin, sex, age,
when promulgating regulations relating Authority and Issuance genetic information, disability, sexual
to the Banks, to consider the differences orientation, gender identity, or status as
between the Banks and the Enterprises Accordingly, for the reasons stated in
the SUPPLEMENTARY INFORMATION, and a parent.
with respect to the Banks’ cooperative (d) Affirmative steps for workforce
ownership structure; mission of under the authority of 12 U.S.C. 4520
diversity. FHFA shall take affirmative
providing liquidity to members; and 4526, 12 U.S.C. 1833e, and E.O.
steps to seek diversity in its workforce,
affordable housing and community 11478, FHFA is amending subchapters
at all levels of the agency, in a manner
development mission; capital structure; A and B of chapter XII of title 12, Code
consistent with applicable law. Such
and joint and several liability. In of Federal Regulations as follows:
steps shall include:
preparing this final rule, the Director (1) Recruiting at historically Black
PART 1207—MINORITY AND WOMEN
considered the differences between the colleges and universities, Hispanic-
INCLUSION
Banks and the Enterprises with respect serving institutions, women’s colleges,
to the final rule’s impact and the ■ 1. The authority citation for part 1207 and colleges that typically serve the
differences outlined in section 1313(f) continues to read as follows: individuals with disabilities and
and determined that the final rule majority minority populations;
would not adversely impact the Authority: 12 U.S.C. 4520 and 4526; 12
U.S.C. 1833e; E.O. 11478.
(2) Sponsoring and recruiting at job
FHLBanks or Enterprises. fairs in urban communities;
PART 1207—[REDESIGNATED AS (3) Placing employment
V. Paperwork Reduction Act
PART 1223] advertisements in media oriented
The final rule does not contain any toward minorities and women;
collection of information pursuant to ■ 2. Redesignate part 1207 as part 1223 (4) Partnering with organizations that
the Paperwork Reduction Act of 1995 and transfer to subchapter B. are focused on developing opportunities
(44 U.S.C. 3501 et seq.). Therefore, for minorities and women to place
FHFA has not submitted any PART 1223—MINORITY AND WOMEN talented minorities and women in
information to the Office of INCLUSION industry internships, summer
Management and Budget for review. employment, and full-time positions;
Subpart B—[Removed and Reserved] and
VI. Regulatory Flexibility Act (5) Where feasible, partnering with
■ 3. Remove and reserve subpart B inner-city high schools, girls’ high
The Regulatory Flexibility Act (5 (consisting of §§ 1223.10–1223.19). schools, and high schools with majority
U.S.C. 601 et seq.) requires that a ■ 4. Add new part 1207 to subchapter A minority populations, to establish or
regulation that has a significant to read as follows: enhance financial literacy and provide
economic impact on a substantial mentoring.
number of small entities, including PART 1207—MINORITY AND WOMEN
small businesses and or small OUTREACH PROGRAM § 1207.3 FHFA contracting and diversity
organizations, must include an initial and inclusion.
regulatory flexibility analysis describing Sec. (a) Responsibilities. FHFA’s Office of
1207.1 Definitions.
the regulation’s impact on small Minority and Women Inclusion (OMWI)
1207.2 FHFA workforce diversity; Equal
entities. Such an analysis need not be Employment Opportunity Program. shall have responsibility for diversity
undertaken if the agency has certified 1207.3 FHFA contracting and diversity and and inclusion in FHFA’s contracting
that the regulation will not have a inclusion. practices.
significant economic impact on a 1207.4 Limitations. (b) Outreach. FHFA’s policy is to
substantial number of small entities. Authority: 12 U.S.C. 4520 and 4526; 12 promote diversity in its contracting
FHFA has considered the impact of the U.S.C. 1833e; E.O. 11478. process. FHFA shall establish a
proposed rule under the Regulatory contractor outreach program intended to
Flexibility Act. The General Counsel of § 1207.1 Definitions. ensure that minority- and women-
FHFA certifies that the final rule, is not The terms in this part have the same owned businesses are made aware of
likely to have a significant economic meaning as in FHFA’s Minority and and given the opportunity to compete
impact on a substantial number of small Women Inclusion Regulation at part for contracts with FHFA. FHFA shall
entities, because the regulation merely 1223 of this chapter, as may be amended conduct outreach activities that may
fulfills statutory requirements that from time to time. include, but are not limited to:
FHFA: (1) ‘‘develop standards’’ that (1) Identifying contractors that are
apply internally; and (2) ‘‘prescribe[s] § 1207.2 FHFA workforce diversity; Equal minority- and women-owned by
regulations’’ establishing FHFA’s own Employment Opportunity Program. obtaining lists and directories
outreach program. (a) Responsibility. FHFA’s Office of maintained by government agencies,
Minority and Women Inclusion (OMWI) trade groups, and other organizations;
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List of Subjects shall have overall responsibility for (2) Advertising contract opportunities
12 CFR Part 1207 diversity and inclusion in FHFA’s through media targeted to reach
employment practices. potential contractors that are minority-
Discrimination, Diversity, Equal (b) General. FHFA shall maintain an and women-owned; and
employment opportunity, Government Equal Employment Opportunity (EEO) (3) Participating in events such as
contracts, Minority businesses, program consistent with the Equal conventions, trade shows, seminars,
Outreach. Employment Opportunity Commission professional meetings, and other

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Document Created: 2018-02-01 15:11:00
Document Modified: 2018-02-01 15:11:00
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Final rule.
Dates		Effective date: March 24, 2017. For additional information, see SUPPLEMENTARY INFORMATION.
Contact		Sharron Levine, Director, Office of Minority and Women Inclusion, [email protected], (202) 649-3496; or Eric Howard, Deputy Director, Office of Minority and Women Inclusion, [email protected], (202) 649-3009; or James Jordan, Assistant General Counsel, [email protected], (202) 649-3075 (not toll-free numbers), Federal Housing Finance Agency, 400 Seventh Street SW., Washington, DC 20219. The telephone number for the Telecommunications Device for the Hearing Impaired is (800) 877-8339.
FR Citation		82 FR 14992
RIN Number		2590-AA87
CFR Citation		12 CFR 1207 12 CFR 1223
CFR Associated		Discrimination; Diversity; Equal Employment Opportunity; Government Contracts; Minority Businesses and Outreach