December 2016 - Getting Serious About Diversity

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FEATURE She called for the industry to have more dedicated community loan officers. Diversity on the Horizon B ien-Aime says the industry is at the very beginning of turn- ing the corner on diversity issues. "It's a relationship business," Bien-Aime said. "People tend to be quite territorial; that makes it dif- ficult to break into the business. Improving diversity isn't going to be easy." Part of the challenge is that mortgage veterans in some areas, particularly appraisers, are staying in the business longer, so there isn't the same progression of people retiring and a new, more diverse workforce coming in to replace them. "You have to take a very targeted approach," Bine-Aime said. "You have to have people dedicated to sustaining the process." That process means more than just paying lip service to proactively improving diversity, Bien-Aime adds. Mortgage firms need to open offices in ethnic communities, actively recruit from colleges and universities that have large minority student populations, and work with vendors who themselves are dedicated to diversity. Additionally, mortgage firms need to be involved in the ethnic communities, attending cultural fairs, parades, and festivals, sup- porting community causes, sports teams, etc., according to Bien- Aime. "When people see you being involved in the community, they are more apt to trust you," he said. Partaking in those activities to be truly involved in the com- munity and hiring a diverse workforce will result in long-term business benefits, Bien-Aime adds. More Changes in the Future I n mid-October, the FHFA issued a Notice of Proposed Rulemaking seeking comments on proposed amendments to its minority and women inclusion regulations. The proposed amendments would: • Require regulated entities to engage in diversity and inclusion strategic planning by developing stand-alone plans or by incorporating diversity and inclusion into their existing planning processes • Encourage the regulated entities to expand contracting oppor - tunities for minorities, women and the disabled through sub- contracting arrangements • Require the regulated entities to amend their policies on equal opportunity in employ - ment and contracting by add- ing sexual orientation, gender identity, and status as a parent to the list of protected classifi- cations • Require regulated entities to provide information in their annual reports to the FHA about their efforts to advance diversity and inclusion through capital market transactions, affordable housing and com - munity investment programs, initiatives to improve access to credit, and strategies for pro- moting the diversity of supervi- sors and managers. The commentary period will extend through the middle of December, so any changes to the proposed amendments likely wouldn't appear until early 2017. No matter what the final amend - ments outline, however, it is clear that these policies are having an important impact not only on the financial institutions required to follow them, but the mortgage industry as a whole. PHIL BRITT started covering mortgages and other financial services matters for a suburban Chicago newspaper in the mid-1980s before joining Savings Institutions Magazine in 1992. When the publication moved his offices to Washington, D.C., in 1993, he started his own editorial services firm and continued to cover mortgages, other financial services subjects, and technology for a variety of websites and publications. I was causing it for the first 15 years, whereas for the next 20-some-odd years I was not. If I had ever been somebody thinking about trying to be in the leadership of the House, my sexual orientation would've stopped that. Other than that, no, I didn't find any dis - crimination either in my electoral situation, or in the support I got from my colleagues. I'm a Democrat, and the Democratic party has been much more supportive of LGBT people in their ranks than the Republicans. The Republican elected officials have had a very hard time, most of them. Very, very few openly gay Republican officials have lasted. The longest lasting one I could think of, Jim Colby, was ultimately forced out way before the normal retirement age because of the prejudices he faced. M // What do you mean when you say you caused it for the first 15 years? FRANK // I did not announce to people that I was gay. A number of people knew it. An increasing number of people knew by the '80s. When I got to Congress, there were people who knew it. But I was not public about it. M // Dodd-Frank has always elicited strong reactions—with critics saying it is overreach- ing, while others say ineffective. What is your response? FRANK // Well, it could hardly be both, could it? I think it is, in fact, very helpful and con- structive. Certainly, if you go towards what's happened with Wells Fargo and the Consumer Financial Protection Bureau, I think that was entirely appropriate. I also believe if you look at the nature of the industry that there is much less of the irresponsible risk-taking that you saw in, for example, AIG. On the other hand, the economy has not been hurting in the sense that the financial industry hasn't been able to do its job. We've had better growth after the great crisis than any other Western economy, although none of them have recovered as quickly as we'd like, for a variety of reasons. In fact, the department elsewhere has been one of the major slowdowns for us. So I think it has been helpful. The last thing I would say is, the kind of loans that were made—housing loans that were made that were the single big - gest cause of the crisis—we are not seeing that degree of irresponsible mortgage loans. M // In a perfect world, what do you think diversity inclusion would look like in the mortgage and financial industry? FRANK // In a perfect world, it would mean that all the various segments of American soci- ety were represented. Not statistically—I think that's not necessary or possible. I think we are further along than we were, but we're not yet where we should be. TH E M R EP O RT | 23

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