We are a new holding company. Some of our banks had over 50 employees and some do not. Does those banks with less than 50 employees have to have an affirmative action plan? Thank you!

Employees who work at an establishment where the contractor employees fewer than 50 employees may be included under any of the following options: a) in an affirmative action program that covers just that establishment; b) in the affirmative action program that covers the location of the personnel function which supports the establishment; or, c) in the affirmative action program that covers the location of the official to whom they report. Typically the holding company will report these banks in their AAP.

What effect or consequences, if any, could be imposed on a bank that has in excess of 50 employees and sells and cashes Savings Bonds and does not have an Affirmative Action Plan.

Worst case scenerio: fines and prohibited from using fed funds. In addition you will have both the EEOC and the OFCCP making annual visits to your office to do "check ups" for the forseeable future.

I need a link to the citation for the affirmative action rules that FDIC regulated institutions must follow.

FDIC regulated has nothing to do with affirmative action plans:

http://www.dol.gov/dol/topic/hiring/affirmativeact.htm

Are banks federal contractors because they cash savings bonds? That sounds like a stretch.

Stretch or not, if you are an issuing or paying agent for the US Treasury or a depositary of government funds in any amount, you are a Federal contractor.

And, having managed one of these programs in a past life, I can tell you that the federal agencies who manage this and will be "in touch" have high expectations re actions, timeliness of reporting, etc.

Our compliance attorneys say that because we have FDIC deposit insurance, we are a contractor. There are at least 2 requirements when you hit 50 employees:

EEO reporting

Affirmative Action Plan


Al

Is a financial institution that is covered by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Association (NCUA) with deposit insurance subject to the Affirmative Actions Program (AAP) requirements under Executive Order 11246, as amended, the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (VEVRAA), as amended, 38 U.S.C. 4212 and Section 503 of the Rehabilitation Act of 1973 (Section 503), as amended?

Yes. Financial institutions with federal share and deposit insurance are considered to be government contractors within the meaning of the regulations implementing Executive Order 11246, as amended, the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (VEVRAA), as amended, 38 U.S.C. 4212 and Section 503 of the Rehabilitation Act of 1973 (Section 503), as amended. These three programs enforced by the Office of Federal Contract Compliance Programs (OFCCP) require equal employment opportunity by government contractors.

The implementing regulations for Executive Order 11246 at 41 CFR 60-1.3 have consistently defined a government contract as any agreement or agreement modification between any contracting agency and any person for the purchase, sale or use of personal property or nonpersonal services. The term "nonpersonal services" includes, but is not limited to, the following services: utilities, construction, transportation, research, insurance, and fund depository. This definition thus explicitly includes agreements for insurance.

The implementing regulations for VEVRAA and Section 503, found at 41 CFR 60-250.2, 60-300.2 and 60-741.2, respectively, also define a government contract as any agreement or agreement modification between any contracting agency and any person for the purchase, sale or use of personal property or nonpersonal services. Like the Executive Order regulations, these regulations also state that the term "nonpersonal services" includes, but is not limited to the following services: utilities, construction, transportation, research, insurance, and fund depository. Therefore, financial institutions with federal share and deposit insurance are considered to be government contractors.

In addition, all federal contractors are required to include an equal opportunity (EO) clause in each of its Government contracts or subcontracts.

I am trying to determine exactly which contracts this applies to …

Are deposit account agreements with municipalities, including state and local governments, that hold deposit accounts with the bank considered government contracts?

Is the EO clause required to be included in all contracts with bank vendors (since they are bank subcontractors)? Or only those contracts directly with a government agency or only those contracts with vendors that provide services directly related to providing FDIC insured deposit account services (like our core processing system, etc)?

I’m so confused about how this new rule and how it applies to the bank.

Any help and clarification that anyone can provide would be greatly appreciated.

And within the next 120 days.....reading the DOL website for info on reporting our paycheck data?