The banking industry is split over a Federal Reserve Board proposal that would allow lenders to collect information on borrowers' race, color, gender, religion, and national origin.

The Fed proposed the change to Regulation B - which implements the Equal Credit Opportunity Act - in April when it completed new Community Reinvestment Act rules.

The final CRA rules dropped a requirement that banks report race and gender information on small-business and farm loans; many critics told the regulators that sort of move ought be made under Reg. B, not CRA.

Comments on the Fed's Reg. B plan are not due until June 27, but some bankers have already weighed in. Those who support the proposal claim the new data would help banks prove they are lending fairly. Others blast the idea for adding paperwork and possibly offending customers.

"Allowing us to collect data concerning our applicants for all types of loans would provide us with one way to demonstrate that we do not discriminate," John M. Hutchison, vice president at Capital City Bank, Tallahassee, Fla., wrote in a comment letter.

However, because the data collection would be voluntary Lucy Griffin, principal at Compliance Management Services, Falls Church, Va., said it would be impossible to get an accurate picture of a bank's lending.

"You can't draw conclusions because the data would be incomplete," she said in an interview.

Still, bankers also praised the proposal as a step toward making the equal-credit act more consistent with community-reinvestment and fair- lending rules. For example, bankers have long complained that while they must lend fairly to all parts of their community, they may not ask customers questions that could flag lending problems.

"The most difficulty our employees have with loan compliance is the fact that the laws are not consistent with each other," wrote Susan F. Hall, compliance officer at Commerce Bank, Columbia, Mo.

"It's nice to finally see some sort of movement towards standardization of regulations," agreed Garot H. Pflumm, compliance officer of Shawnee State Bank, Shawnee, Kan.

However, other bankers protested the change, citing concern that asking for personal information may offend borrowers. "We feel this is an unnecessary invasion of the privacy of our customers," wrote Leon Moore, president of Bank of Floyd, Va.

Ms. Griffin agreed. People are automatically uncomfortable when questions about their race or national origin are being asked, she said.

Another common complaint was voiced by Bobby A. Howard, president of Bank of Charlotte County in Phenix, Va. "This creates more work and more bookkeeping for banks," he wrote.

Several commenters asked the Fed to take religion off the list of questions banks can ask customers.

"An accurate documentation of an applicant's religious or spiritual beliefs for the purpose of monitoring lender discrimination is impossible," wrote A. Christine Chisholm, compliance officer at Taneytown (Md.) Bank and Trust Co.

Nessa Feddis, senior legislative counsel at the American Bankers Association, said that though it's still too early to be sure, the negative comments may persuade the Fed to scrap the rule.

"Banks are skeptical about this proposal," she said. "Some worry that while it might be optional now, it could be mandatory later."

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