regulators of breaking the law by requiring banks with more than $250 million of assets to collect small-business loan data. "There is no legal authority for the agencies to impose data collection and reporting requirements under the Community Reinvestment Act," the ABA said in a recent letter to the Office of Management and Budget. "On that basis, the OMB should not renew the authorization for this data collection." The ABA urged the OMB - which must sign off on all agency data collection requests - to seek a Justice Department opinion on the matter. The OMB is considering requests by the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency to renew their CRA- related data collection programs. Under revised CRA rules that took effect Jan. 1, 1996, banks with more than $250 million of assets must track the number and amount of small- business and small-farm loans they originate, along with their borrowers' location and annual revenues. Paul A. Smith, senior federal administrative counsel at the ABA and author of the March 30 letter, said the CRA law does not authorize regulators to collect lending data. He said former Sen. William Proxmire, who sponsored the original CRA bill, felt supervisors obtained enough loan information during routine exams to make a fair determination of an institution's CRA compliance. An early provision in the bill requiring additional reporting by lenders was deleted, Mr. Smith said. Carmen J. Sullivan, the FDIC's director of compliance and consumer affairs, said an interagency group is reviewing the ABA letter. She declined to comment further. If the OMB sides with the agencies, John F. Cooney, a former OMB deputy general counsel now with the law firm Venable, Baetjer, Howard & Civiletti, said the ABA could sue the regulators or provoke a court battle by having member banks withhold loan data. There is at least one precedent for Justice Department intervention on a CRA issue. In 1994, the Comptroller's Office asked the department for an opinion on whether regulators had the authority to impose tough enforcement actions on banks that are not complying with CRA. The Justice Department said "no," so the agencies dropped the proposal. In addition to questioning the legality of small-business and small-farm loan reporting requirements, Mr. Smith's letter accused the FDIC and OCC of low-balling the time and paperwork CRA requires. "Both agencies have egregiously underestimated the burden," he wrote. The ABA's letter also assailed a CRA loophole that imposes large-bank reporting requirements on some small banks. Under CRA rules, banks owned by a holding company with assets exceeding $1 billion must report on their small-business loans.
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