Monday, January 24, 2011

CBAA Evening Program: Dodd-Frank Provisions for Minority and Women Business

On January 21st, federal financial agencies established new offices devoted to ensuring minorities and women businesses are included in contracting opportunities. Moreover, these offices are still staffing up; therefore, professional opportunities also exist.

The Dodd-Frank legislation that became law in the summer of 2010 include these provisions.

Attend the Wednesday, January 26th Chicago Booth Black Alumni Association's evening program event in Washington, DC to learn more!

Wednesday, January 26, 2011 from 6:30 PM - 8:30 PM (ET)

University of Chicago's Office
1730 Pennsylvania Avenue N.W.
Suite 275
Washington DC

Click here.

Tuesday, January 18, 2011

Fed names Directors of Regional Fed Bank OMWI Offices.

According to the Fed,

"The Federal Reserve on Tuesday announced the establishment of offices to promote diversity and inclusion at the Federal Reserve Board and at all 12 of the Federal Reserve Banks.

The offices will build on the Federal Reserve System’s long-standing efforts to promote equal employment opportunity and diversity, and will continue to work to foster diversity in procurement, with a focus on minority-owned and women-owned businesses. The Dodd-Frank Wall Street Reform and Consumer Protection Act required that diversity and inclusion offices be established at certain federal agencies, including the Federal Reserve Board, and at the Federal Reserve Banks. In addition to promoting diversity at the Board and throughout the System, the Board’s Office of Diversity and Inclusion will play an integral role in the development of standards to assess the diversity practices at entities regulated by the Federal Reserve as required by the Dodd-Frank Act.

The heads of the diversity and inclusion offices are:

• Federal Reserve Board, Sheila Clark.
• Federal Reserve Bank of Boston, Marques Benton.
• Federal Reserve Bank of New York, Diane Ashley.
• Federal Reserve Bank of Philadelphia, Mary Ann Hood.
• Federal Reserve Bank of Cleveland, Peggy Velimesis.
• Federal Reserve Bank of Richmond, Tammy Cummings.
• Federal Reserve Bank of Atlanta, Joan Buchanan.
• Federal Reserve Bank of Chicago, Valerie Van Meter.
• Federal Reserve Bank of St. Louis, James Price.
• Federal Reserve Bank of Minneapolis, Duane Carter.
• Federal Reserve Bank of Kansas City, Donna Ward.
• Federal Reserve Bank of Dallas, Tyrone Gholson.
• Federal Reserve Bank of San Francisco, Susan Sutherland."

Wednesday, January 12, 2011

From Bloomberg: "U.S. Government Contractors Face New Minority Hiring Mandate"

Bloomberg News reported today that "U.S. Government Contractors Face New Minority Hiring Mandate." The article goes on to state that:

"U.S. financial regulators are required to open 20 offices this month endowed with new powers to force government contractors and subcontractors to diversify their staffs or risk losing federal business.

The Dodd-Frank law orders U.S. financial regulators to set up Offices of Minority and Women Inclusion to monitor whether they and their contractors are hiring enough women and minorities -- a mandate that could have far-reaching effects on public and private-sector hiring.

The offices are being established at agencies ranging from the Federal Deposit Insurance Corp. to each of the 12 Federal Reserve banks.

Among other duties, staff will scrutinize hiring at firms that do business with the regulators and take steps to terminate contracts if the companies haven’t made an adequate effort to employ women and minorities.

The law requires that most agencies must open their offices by this month. Some are getting a slow start. Citing budget concerns, the Securities and Exchange Commission said in December that it would delay opening several new offices mandated by the Dodd-Frank law, including the Office of Minority and Women Inclusion.

Congressional Democrats pushed to include the new offices in the law because some were unhappy that few of the major contracts awarded by government agencies in the aftermath of the 2008 financial crisis went to minority-owned firms. Of the $1.3 billion in current Treasury Department contracts, $263 million are held by minority-owned firms, and $130 million are held by companies owned by women, according to a Bloomberg Government analysis of the federal procurement database.

‘Fair Inclusion’

Democrats..have said they also were concerned about the issue because according to the Government Accountability Office, white men held 64 percent of senior management positions at financial services firms.

The law requires each new office to develop and apply a policy that will ensure 'to the maximum extent possible the fair inclusion' of women and minorities in the contracting process. The federal government defines a minority-owned business as one that is at least 51 percent owned and operated by U.S. citizens who are Asian, black, Hispanic, or American Indian.

'It’s an effort to bring more players into the marketplace with differing backgrounds,' said William Michael Cunningham, chief executive of Creative Investment Research Inc. a Washington-based investment advisory firm.

The congressional oversight panel monitoring the Troubled Asset Recovery Program reported in October that the Treasury Department had awarded 96 contracts worth $436.7 million to implement the program, but only one 'prime' contract had gone to a minority-owned business. The companies that received the contracts ranged from banks such as The Bank of New York Mellon Corp. to accounting firm Ernst & Young LLP and law firmCadwalader Wickersham & Taft LLP.

It’s unclear exactly how the Offices of Minority and Women Inclusion will differ from the existing Office of Federal Contract Compliance Programs run through the Department of Labor, although they may have a broader mandate..

Firms that contract with financial regulatory agencies could see their compliance costs increase. If each agency creates its own rules and protocols, companies that work with more than one agency could be complying with several new sets of reporting requirements..

At the same time, the new offices will create some new opportunities for businesses owned by women and minorities, as well as for applicants for federal jobs.

In particular, firms owned by minorities and women that provide legal, financial, technology and human-resources services could find new opportunities.."

We disagree with the headline.

While Dodd/Frank calls for the creation of Offices of Minority and Women Inclusion at all Federal financial institution regulatory agencies, it is not a New Minority Hiring Mandate. (Only firms who have been discriminating against women and minorities could consider the law a new mandate: one to obey the laws of the land.)

As we said in our August, 2010 blog posting on the issue, the law:

"is actually called for by Adam Smith, who said, in The Wealth of Nations that, 'To promote the little interest of one little order of men in one country, it hurts the interest of all other orders of men in that country, and of all men in all other countries.' The law seeks to broaden 'one little order of men in one country' to include minorities and women."

We believe the new law represents a significant opportunity for women and minority-owned firms. In response, we are hosting a Webinar on Section 342 of the Dodd/Frank Act.

Friday, January 7, 2011

Another forecast confirmed

The Labor Department today announced..that "unemployment dropped to 9.4 percent—its lowest number since mid-2009—and employers added 103,000 non-farm jobs in December." We agree with Secretary of Labor Hilda L. Solis: “One thing is for certain: (Obama Administration) investments have reversed the trend of catastrophic job losses and put this country on the road to recovery.”

These unemployment numbers confirm our September 2, 2010 Fully Adjusted Return (tm) forecast: "unemployment will trend downward as payrolls and the economy gain strength."

Even with the outstanding unemployment numbers, as we noted in our December 31, 2010 Fully Adjusted Return (tm) Forecast, "most stock market forecasters expect equity markets to do well in 2011. While we expect certain sectors, like technology and energy, to do better than others, we are not as optimistic as most."

Thursday, January 6, 2011

Section 342 Forecast Confirmed. Probability of repeal placed at 25%.

We predicted during our webinar: The Election and Section 342, that "influential and wealthy tea party contributors will push repeal of financial reform effort first." On January 5th, Tea Party Caucus Founder U.S. Representative Michele Bachmann introduced a bill to repeal the Dodd-Frank Law:

"H.R.87 Latest Title: To repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act. Sponsor: Rep Bachmann, Michele [MN-6] (introduced 1/5/2011). Cosponsors (4)

Latest Major Action: 1/5/2011 Referred to House committee. Status: Referred to the Committee on Financial Services, and in addition to the Committees on Agriculture, Energy and Commerce, the Judiciary, the Budget, Oversight and Government Reform, Ways and Means, and Small Business, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned."

That the Dodd/Frank repeal bill has been introduced BEFORE the Health Care repeal bill is indicative of Tea Party's true (revealed) priorities. As we said in our webinar, despite vitriolic rhetoric concerning health care, the wealthy backers of the tea party movement are primarily focused on financial issues. They are controlling the Tea Party's agenda and movements.

We now estimate the probability of full Dodd-Frank repeal at 25% (0.25). Specific estimates of the probability of repeal are detailed in the Webinar.