Home Savings of America is asking the Office of Thrift Supervision for permission to collect race and gender data from small- business loan applicants.
'We really can't tell whether we're meeting our small-business lending goals unless we can track this data," Home Savings chief administrative officer and general counsel Madeleine A. Kleiner said Wednesday.
The Federal Reserve Board's Regulation B bans banks and thrifts from collecting race and gender information from loan applicants. However, the rule also says institutions establishing "special purpose credit programs" may collect this type of data. These programs must extend credit to people who would not normally qualify for loans.
This is the first time a thrift has requested an exemption to Reg B, said an OTS spokesman, who declined to comment further.
In a July 11 letter to OTS Chief Counsel Carolyn J. Buck, the Irwindale, Calif.-based thrift argued that its program would qualify because it would extend 30% of its small-business loans to firms owned by minorities and disabled people.
Because the thrift is still setting up its small-business lending program, the data also would help Home Savings develop underwriting standards to help prevent discriminatory practices, Home Savings senior counsel Sherwin F. Root said.
Home Savings, the second-largest thrift in the nation, is widely considered to have one of the better minority lending records. Disclosing race and gender data on small-business lending could prove to be a public relations coup.
Community activists applauded the plan.
"This would enable Home to be a much more effective, safer, and sounder small-business lender, because they won't be lending in a blind situation," said Robert L. Gnaizda, general counsel for the Greenlining Institute.
Last year the Federal Reserve considered amending Regulation B to let financial institutions record the race and gender of all borrowers. However, Fed governors withdrew the proposal in December.