The final standards reflect input from some 200 comments from depository institutions, holding companies, industry trade groups, financial professionals, consumer advocates, and community members that offered a greater understanding of the issues confronting minorities and women in finding employment and business opportunities within the financial services industry, according to an interagency news release. Despite the reported due diligence, the standards are “unconstitutional and wrong-headed,” according to Marvin Umholtz, an Olympia, Wash.-based consultant and former credit union executive.

“The polarized political environment in which these ill-conceived, racially-charged diversity quotas have been lobbed like a hand grenade onto Main Street is certain to create an explosion of rhetorical discord between partisans in Congress,” Umholtz said. “These misguided racial and gender diversity quotas for the workplace, and for contracting, promise to be a compliance and reputation-risk nightmare.”

Claims by the various enacting agencies, including the NCUA, that the joint standards were additional guidance under another existing statute in the Administrative Procedures Act was clumsy sleight of hand, since that statute is also unconstitutional for the same reason, Umholtz claimed. The joint diversity standards, even in their “voluntary” and “leading practices” final forms, were established under a law that violates the U.S. Constitution 14th Amendment of concerning equal protection.

“The joint diversity quota standards could have been a lot worse, but they still will give the community activists more disruptive leverage over financial institutions, and will also give the plaintiffs' attorneys more potential causes of action,” Umholtz added.