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Feds demand diversity on Wall Street
A little-noticed section of the Wall Street reform law grants the federal government broad new powers to compel financial firms to hire more women and minorities — an effort at promoting diversity that’s drawing fire from Republicans who say it could lead to de facto hiring quotas.

Deep inside the massive overhaul bill, Congress gives the federal government authority to terminate contracts with any financial firm that fails to ensure the “fair inclusion” of women and minorities, forcing every kind of company from a Wall Street giant to a mom-and-pop law office to account for the composition of its work force.

Employment law experts say the language goes further than any previous attempt by the U.S. government to promote diversity in the financial sector — putting muscle behind federal efforts to help minority- and women-owned firms gain access to billions in federal contracts.

For advocates of the measure, it is a past-due shove to an elite industry that is heavily male and white — one in which Government Accountability Office studies show women and minorities have made only minimal gains in the past 15 years.

But to opponents, the provision signifies a brazen government intrusion into corporate practices, with language written so vaguely that some believe it could lead to an unofficial quota system.

“This expands exponentially the reach of the federal government in terms of auditing,” said Peter Kirsanow, an attorney and Republican appointee to the U.S. Commission on Civil Rights. “This is an expansion of racial engineering that we haven’t seen in a long time.” ...