Editor's Note: This article was originally featured in the September issue of DS News, available now.
Amidst all the talk of Dodd-Frank and its possible rollback or replacement, one thing is routinely never mentioned–Section 342.
A little-known part of the bill, Section 342 requires the Consumer Financial Protection Bureau (CFPB)—and other federal financial regulators—to create an Office of Minority and Women Inclusion, as well as take part in other diversity-related objectives.
It’s Stuart Ishimaru—and his office at the CFPB—who’s in charge of putting Section 342 into action.
And really, there’s no better person to do it.
With a storied history in civil rights, Ishimaru has spent his career fighting for equal opportunity—in the workplace, in the military, and throughout the country. Now, he’s taking the fight to the financial sector, leading the banking and lending industries down the path of diversity.
GOOD GUY WORK
Ishimaru has spent the whole of his 33-year career fighting for diversity, inclusion, and civil rights, doing what he calls “good guy work.”
He’s worked for the U.S. Commission on Civil Rights, the Department of Justice’s Civil Rights Division, and was appointed by President Bush to be Commissioner of the Equal Employment Opportunity Commission, and, in his early years, he served as Assistant Counsel to the U.S. House of Representatives Judiciary Committee.
“I’ve always had the luxury of doing good guy work,” Ishimaru said. “It’s been work that I both enjoyed doing and I thought was the right thing.”
And “good guy work” it certainly has been.
Over the course of the last four decades, he’s had his hand in some of the country’s most momentous milestones. He worked on history-changing laws like the Fair Housing Amendments Act, the Americans with Disabilities Act, and the Civil Rights Acts of 1990 and 1991. He led hearings on age discrimination in the workplace and voting rights, and he testified before Congress on the Employment Nondiscrimination Act, the Paycheck Fairness Act, and more.
One of Ishimaru’s biggest accomplishments, at least according to his longtime peer and colleague Wade Henderson, is the role he played in the Civil Liberties Act of 1998, also known as the Japanese-American Redress Bill.
“That bill could not have become law without Stuart’s engagement,” said Henderson, who served as President of the Leadership Conference on Civil and Human Rights for nearly two full decades before retiring in 2016. “I know that as a point of fact.”
As a third-generation Asian-American, Ishimaru knows first-hand what discrimination looks like. And given his family’s history—which has long served as an inspiration for his career and professional pursuits, it’s no surprise he played such a strong role in the bill’s passage.
“Three of my four grandparents came to this country as immigrants,” Ishimaru said. “They were Japanese nationals. They lived in California. Pearl Harbor was bombed, and everyone on the West Coast who was of Japanese ancestry was rounded up, put in camps, and later incarcerated in the interior of the U.S. in internment camps.”
His grandparents and parents were among those interned.
“Even though it didn’t happen to me, it happened to my family and to my community,” Ishimaru said. “That was an experience that was formative on a certain level, and it had a big impact on me, more probably than I knew. Knowing that could happen to people and to communities based on their ethnic origin or their race was extremely troubling.”
Ishimaru says it was his family’s story, as well as “just growing up in the ’60s,” that led him down the civil rights road.
“Growing up in the ’60s, it wasn’t that far removed from the end of World War II, and seeing the changes that were going on, seeing the civil rights protests, knowing that things that they were talking about at those protests, and linking it back to how my family and my community was treated less than 20 years before, was really striking,” he said. “That, I think, led me to an interest in doing civil rights work.”
And since graduating from George Washington University Law School in 1983, that’s just the work he’s done.
“Stuart has always affiliated with institutions, individuals, organizations that have promoted civil and human rights,” Henderson said. “Even when he works in federal agencies like the CFPB, he brings with him, I think, a commitment to fulfilling the mission of CFPB as he defines it—a positive vision that we share. America is rich and full of opportunities that are made real by the enforcement of laws and regulations that preserve a fair and level playing field.”
COMING TO THE CFPB
In 2012, Ishimaru joined the Consumer Financial Protection Bureau less than a year after it was established under the Dodd-Frank Wall Street Reform and Consumer Protection Act. He became the first and only head of its Office of Minority and Women Inclusion.
In his position, he’s charged with ensuring the bureau is diverse and that its hiring, management, and recruitment practices are fair and inclusive.
But enforcing Section 342 starts at the top, within the bureau itself. Ishimaru says his office looks at how the CFPB hires and retains employees, and works to “create opportunities for minority and women contractors to do business with the bureau.”
“One way we would do this is to make sure that we’re interviewing a broad and wide range of possible pieces of talent to come to work for us,” Ishimaru said. “We want to recruit broadly, to ask similar questions of similar candidates, things like that.”
According to Hilary O. Shelton, another longtime colleague and friend of Ishimaru’s, these diversification efforts at the CFPB provide an example for other financial institutions to model.
“We see in many ways how diversity is handled at the CFPB as a demonstration of how it should work in banks and other financial services institutions,” said Shelton, the Director of the National Association for the Advancement of Colored People’s (NAACP)Washington Bureau and the NAACP’s SVP for Advocacy and Policy.
But encouraging internal diversity at the CFPB is just one small piece of the puzzle. Ishimaru and his team also work with all the bureau’s regulated entities to live up to the goals of Section 342—and to help them set up diversity and inclusion initiatives in their own organizations.
“A lot of these regulated entities have not been under federal regulation before, so we’ve worked out and continue to work out a relationship with them, letting them know what their responsibilities are under federal law, as well as how best to comply with it,” Ishimaru said.
One sector that’s been particularly quick in adopting 342? Ishimaru says it’s the mortgage industry.
“The mortgage folks that we’ve dealt with have welcomed us in,” Ishimaru said. “They’ve welcomed the conversation. We have learned from them, and hopefully, they’re learning a little something from us.”
According to Ishimaru, parts of the mortgage sector had already done quite a bit of work in the diversity and inclusion space before his office stepped in.
“We started our efforts dealing with our regulated entities with people in the mortgage industry, due in large part to the work that has been done by the industry itself in thinking about diversity and inclusion,” he said. “We’ve been pleased seeing some of the efforts that have gone on, including those of the American Mortgage Diversity Council. Having people think about these issues, wanting to get involved to try to bring diversity and inclusion into their work is a good thing, and something that made us think the mortgage industry would be a good place to start this dialogue.”
In addition to his role as head of the Office of Minority and Women Inclusion, Ishimaru also manages the CFPB’s Office of Equal Opportunity and Fairness—and its Office of Civil Rights, which deals with equal opportunity issues in the bureau’s workplace.
But no matter what title he’s going by, one thing is clear: Ishimaru has already made an impact at the bureau.
“I think he has been responsible for making sure that the bureau has a diverse and competent staff, and he has been involved in helping to establish the agency from its earliest days,” Henderson said. “I think he’s done a terrific job in building an institution that is true to its mission of work on behalf of consumers, but it also recognizes the diversity of our country and the value of having a diverse workforce.”
Henderson, as well as the NAACP’s Shelton, played a role in the initial drafting of the Dodd-Frank Act, which subsequently created the CFPB—and the very post Ishimaru serves in. And according to Shelton, there’s been no better fit for the job.
“We really need someone that is as extraordinary as Stuart in that role of OMWI to continue to push forward the kind of diversity that we know we need throughout our financial services sector,” Shelton said.
DIVERSITY WITHOUT DODD-FRANK?
Though the future of Dodd-Frank, and subsequently Section 342, may be on tenuous footing—especially with the House’s recent passing of its potential replacement, the Financial CHOICE Act, the hope for diversity in the financial sector isn’t lost just yet.
After all, there are other laws that protect consumers and prevent discrimination, like the Fair Housing Act, the Fair Lending Act, Title 12, the Housing and Economic Recovery Act, the Equal Opportunity Act, the Equal Credit Opportunity Act, and the Civil Rights Act of 1964. And those certainly help, according to Ishimaru.
“There are long-standing civil rights laws that say you cannot discriminate on people on the basis of various factors, including race, gender, religion, age, disability, sexual orientation, and on other factors,” he said. “Those laws are on the books, and they’re likely to stay on the books. That gets you part of the way there—and a long part of the way there.”
Still, despite the many regulations in place to protect civil rights and stop discrimination—both in the workplace and in lending practices, according to Ishimaru, those only take the industry so far. Organizations realizing the “good business sense” in diversity can push it even further.
“Having companies think about how this makes sense and providing benefits for them is a far bigger driver than any sort of requirement in Dodd-Frank,” Ishimaru said. “Yes, Dodd-Frank talks about diversity and inclusion, encouraging it, understanding its import, but really when you sit down and talk to people within the industry, they say, ‘We want to hire great people. We want to find out where they are. We want to bring them into our fold. We want to hire great talent and we want to keep them.’ Knowing that there are bigger pools of talented people or bigger shares of the market than you may have had in the past is a plus for them.”
When working with institutions on implementing Section 342, Ishimaru says it’s all about posing those bigger-benefit questions.
“How do you retain people? How do you keep employees happy? How do you tap into new markets of people you may not have thought about in the past?” he asks. “How do you sell new markets the goods and services that you provide? Does it help you to have a diverse employee base that can both understand and reach for various markets that you haven’t been able to in the past? All of those are business drivers that, when you think about why diversity and inclusion is important, those drivers will lead many companies to say, ‘This makes good business sense for us, and we want to do that. We want to increase market share. We want to get great people to work for us. We want to keep those people for long periods of time to stay with us, as well.’ That, I think, is a plus for anyone doing business.”
But sometimes, even realizing these business benefits isn’t enough. According to both Ishimaru and Shelton, there’s a hurdle that often holds up inclusion issues—and not just in the financial sector, either: Complacency.
“People are really busy, right?” Ishimaru said. “They can fall into doing things in ways that are comfortable to them. They know where to look for people. They know that if we do X, Y, and Z, we can sell this much product. We fall into these comfort zones where we do what we do, and it comes up with a decent result.”
Pushing out of these comfort zones is crucial for business growth, according to Ishimaru.
“If we want to get better, sometimes we have to go beyond that,” he said. “It’s crazy not to think about new markets for both possible employees or for selling whatever product you have.”
Shelton says this sort of complacency—the desire to stick to the status quo—is also common with people in high-level positions like Ishimaru’s.
But Ishimaru bucks the trend, according to Shelton.
“Oftentimes, you’ll have people in positions along those lines and as long as they can keep things afloat, everything is great,” Shelton said. “They’re not pushing to get more done and seeing each step as a preparation for the next step, but that’s where Stuart is.”
Shelton calls this “recognizing it’s a movement, not a moment.”
“We know the final goal some people say is impossible to accomplish, but we know that as we continue to move forward, step by step, issue by issue, and success by success, that you keep moving ahead,” Shelton said.
And Ishimaru agrees. In regards to diversity and civil rights, he says, we’ve gone quite the distance—but there’s still a long road ahead.
“Things have changed a lot over a relatively short period of time. For a lot of people, they say, ‘Well, that’s enough. We’ve made this progress. We can do what we do now, and not worry about these issues anymore,’” Ishimaru said. “As much as I wish we were in a color-blind, gender-blind, disability-blind society, I don’t think we are yet, although we’ve come a long way. It’s amazing the progress we’ve seen on a certain level, in a relatively short period of time.”
FIGHTING THE GOOD FIGHT
Regardless of the future of Dodd-Frank—or how complacent or set in its ways the financial services industry becomes—if Ishimaru’s history is any indication, he’ll never stop fighting the good fight.
“I’ve never seen him take his eyes off the prize or stop continuing to move forward to bring some solution to the troubles we have throughout our country on so many important issues, and these days, financial services issues,” Shelton said. “It’s important not to forget … and he doesn’t.”