Payday loans

September 8, 2011

Affirmative Action Obligations and Savings Bonds…

You may have already heard that beginning January 1, 2012, financial institutions will no longer sell U.S. savings bonds.  In order to buy savings bonds, you will need to do so through the U.S. Treasury Department’s website:  http://treasurydirect.gov.

So what does that have to do with affirmative action obligations?  Well, if you are a bank or a credit union, you may have maintained an Affirmative Action plan based on the fact that you issue U.S. savings bonds, one of the criteria under Executive Order 11246.  The Executive Order identifies the criteria that subjects financial institutions to federal affirmative action requirements:

  • The institution is issuing and paying agents for U.S. savings bonds and notes in any amounts
  • The institution serves as a depository of government funds in any amount
  • The institution holds a prime or subcontract with the federal government of at least $50,000.

So, if financial institutions are no longer issuing U.S. savings bonds, then are they relieved of their obligation to maintain an affirmative action plan?  Well, in plain language the answer is probably “no”.  The Office of Federal Contract Compliance Programs (OFCCP) takes the position that financial institutions participating in Federal Deposit Insurance Corporation (FDIC) or National Credit Union Association (NCUA) programs are still subject to the agency’s jurisdiction. 

As for next steps, financial institutions should review whether they must continue to prepare written affirmative action plans.  The OFCCP’s opinion is that financial institutions that serve as a depository of government funds in any amounts, participate in FDIC or NCUA programs, or hold a federal contract or subcontract of at least $50,000 should continue to prepare affirmative action plans even after Jan. 1, 2012.

Source:  SHRM

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