Financial Institutions Not Necessarily Off Affirmative Action Hook

The U.S. Department of the Treasury has announced that as of January 2012, financial institutions will no longer handle over-the-counter sales of paper savings bonds, a duty that triggers affirmative action obligations. However, in most cases, this will not absolve financial institutions with at least 50 employees of their affirmative action duties. The Office of Federal Contract Compliance Programs (OFCCP) recently clarified that two other criteria may still trigger those obligations: (1) the institution serves as a depository of government funds in any amount; or (2) the institution has a “government contract” (prime contract or subcontract) of at least $50,000.

The OFCCP has long taken the position that FDIC and NCUA deposit insurance constitutes a “government contract.” Accordingly, those financial institutions with at least 50 employees, which serve as a depository of government funds, or which have a FDIC or NCUA deposit insurance contract of $50,000 or more, remain subject to federal affirmative action obligations under Executive Order 11246, the Vietnam Era Veterans Readjustment Assistance Act of 1974, and Section 503 of the Rehabilitation Act of 1973. For affirmative action questions or assistance, please contact Chris Chrisbens (303.223.5469; or Sandie Harrison (303.223.5384;