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Affirmative Action Plans for Banks
by Bob McComas, BOL Guru

For anyone who has ever been involved in developing an Affirmative Action Plan, the task is nothing short of exhausting. This is a time consuming complex and focused process to undertake for anyone. An Affirmative Action Plan requires a complex system of statistical analysis of the employer's current workforce, the number of new hires promotion, and job applicant for the past twelve months, and the inclusion of the external workforce availability gained from various government agencies.

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Banks and other financial institutions with 50 or more employees are required to have an Affirmative Action Plan because they are deemed to be a "Federal Contractor" under the law by virtue of holding treasury tax or loan accounts, handling saving bonds, and acting as government depositories. A more specific definition of this requirement is noted in the January 2002 issue of the Banking and Finance.

The article states: "... officials at the Office of Federal Contract Compliance Programs ("OFCCP"), the Department of Labor Division charged with enforcing affirmative action requirements, have indicated that the OFCCP considers the fact that financial institutions take federally insured deposits as another "hook" to classify a financial institution as a Federal Contractor. Indeed, in recent years the OFCCP has made clear that it intends to closely monitor the hiring practices of financial institutions through enforcement of Executive Order 11246. In the past year, the OFCCP has audited numerous financial institutions ... throughout the country."

The article further points out that" The affirmative action regulations require employers to develop and implement a formal written AAP if they are (a depository of government funds in any amount) or (an issuing and paying agent U.S. saving bonds and saving notes.) Nearly all financial institutions, which are members of the federal banking systems, will have government funds deposited to them from time to time. Many savings and loan organizations and other financial institutions will also meet these criteria. In the eyes of the OFCCP, simply having one dollar in government deposits during the calendar year will require the organization to maintain a written affirmative action plan.

Additionally, many banks hold transfer authority for the US saving bonds, as do most credit unions. Similarly private corporations, brokerages, and other investment organizations also frequently have such transfer agency authority for U.S. savings bonds and offer the sale and redemption of those bonds to employees and customers as a service or courtesy."

Banks covered under Executive Order 11246 must maintain three different types of written AAPs for: (1) minorities and women; (2) disabled individuals; and (3) Vietnam era, special disabled, and other protected veterans. Importantly, the OFCCP implemented significant regulatory changes last year affecting the required contents of a company's narrative affirmative action plans and also regarding how the required annual statistical analysis and reporting requirements are met. Preparation of an AAP is a time consuming and complex process of the statistical analysis and narrative development. Banks who do not use an outside consultant for preparing their AAP, should be prepared to devote one person full time to its preparation who is knowledgeable in this area of the law.

First published on 3/29/04

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