WASHINGTON The banking agencies should drop two of the most controversial provisions of the proposed Community Reinvestment Act rules, four industry groups said in a joint letter Nov. 21.
The groups asked their regulators to scrap plans for requiring banks with more than $250 million in assets to report the sex and race of small business borrowers.
Those data items could violate the privacy of borrowers, and would provide the public with an incomplete picture of total small business lending, they said.
The agencies also should abandon their effort to apply enforcement powers, including civil money penalties and cease and desist orders, to CRA, they said.
The four groups argued that the law never envisioned applying these sanctions. Rather, the act specifies that banks with unacceptable records should be prevented from expanding.
The trade group letter was one of more than 1,000 comments received by the agencies Monday.
The American Bankers Association, the Bankers Roundtable, the Savings and Community Bankers. of America, and the Consumer Bankers Association signed the letter to the four bank and thrift regulatory agencies.
The missing trade group, the Independent Bankers Association of America, refused to sign. IBAA executive vice president Kenneth Guenther said his group objects to a Consumer Bankers Association proposal to expand data reporting to small banks if it can't kill the requirement altogether.