New new immigrants of the post-1965 era, overwhelmingly from outside Europe, were upending American racial conventions. Asians, greatly rising in number, were rapidly being judged to be smarter and, eventually, to be richer than native-born whites. Latinos formed 13 percent of the population by 2000, edging out African Americans as the most numerous minority.
The U.S. census, without peer in scoring the nation’s racial makeup, had begun to notice Latin Americans in the 1940s by counting up heterogeneous peoples with Spanish surnames and hastily lumping them together as “Hispanics.” Though an impossibly crude measurement, it survived until 1977. By that point, the federal government needed more precise racial statistics to enforce civil rights legislation. To this end, the Office of Management and budget issued Statistical Policy Directive no. 15.
Here was a change worth noting: in the racially charged decades of the early twentieth century, governments at all levels had passed laws to separate Americans by race. […] The Civil Rights Act of 1964 and the Voting Rights Act of 1965 began to change all that, so that by the late twentieth century the rationale for counting people by race had morphed into a means of keeping track of civil rights enforcement. Statistical Policy Directive no. 15 set the terms for racial and ethnic classification throughout American society by directing federal agencies–including the U.S. census–to collect data according to four races (black,  white, American Indian/Alaskan Native, and Asian/Pacific Islander–Hawaiian was added later as a concession to protests) and one ethnic category (Hispanic/Latino, which is not racial). Elaboration was good for civil rights, but it opened the way to chaos.
Under these guidelines the Hispanic/Latino classification portended enormous turmoil. Now that there was a “non-Hispanic white” category, did there not also exist Hispanic white people? Yes, no, and other. Faced with the given racial choices on the census of 2000, fully 42.2 percent of Latinos checked “some other race,” rather than “black” or “white,” throwing nearly 6 percent of Americans into a kind of racial limbo.
In addition, the U.S. Census of 2000 had to increase a deeper and more personal recognition of multiracial identities. For the first time, respondents were allowed to describe themselves as belonging to one or more of fifteen “racial” identities.
History of White People, 384-385.
(N.B.: But this account seems confused. The Census didn’t start counting Latinos in 1940, it started counting them in 1930 with the “Mexican” racial category and then switched to the surname method when protest killed the category. The 1930 decision wasn’t initially developed to serve civil rights law; it was part of the racial “darkening” of Latinx people following the 1920s-1930s and heralded the age of mass deportation. Etc.)