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Are we required to maintain an Affirmative Action Plan (AAP) if we no longer sell savings bonds? We do redeem savings bonds. – IBA Compliance Connection

IBA Compliance Connection

Your go to source for compliance!

Are we required to maintain an Affirmative Action Plan (AAP) if we no longer sell savings bonds? We do redeem savings bonds.

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Yes, the AAP requirements apply to your bank. The AAP requirements apply to banks with more than fifty employees that either issue or redeem U.S. bonds or hold U.S. government deposits. While your institution no longer sells savings bonds, its redemption activities do trigger the AAP requirements (assuming that your bank still has more than fifty employees).

In addition, we should note that the Department of Labor interprets the AAP requirements broadly and has stated that they apply to all financial institutions with more than fifty employees by virtue of their access to federal deposit insurance — without consideration of their savings bond or U.S. government deposit activities.

For resources related to our guidance, please see:

  • 41 CFR 60-2.1(b) (“Each nonconstruction contractor must develop and maintain a written affirmative action program for each of its establishments if it has 50 or more employees and: . . . (iii) Serves as a depository of Government funds in any amount; or (iv) Is a financial institution which is an issuing and paying agent for U.S. savings bonds and savings notes in any amount.”)
  • Department of Labor, Office of Federal Contract Compliance Programs FAQs (“Is a financial institution that is covered by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Association (NCUA) with deposit insurance subject to the Affirmative Actions Program (AAP) requirements under Executive Order 11246, as amended . . . ? Yes. Financial institutions with federal share and deposit insurance are considered to be government contractors . . . .”)