Magazine article American Banker

Activists: New Fed Will Authorize Voluntary Plan on Race, Sex Data

Magazine article American Banker

Activists: New Fed Will Authorize Voluntary Plan on Race, Sex Data

Article excerpt

Community activists are betting the arrival of two Clinton appointees will force the Federal Reserve Board to revive a plan permitting banks to collect data about the race and sex of small-business and farm borrowers.

The proposed changes to Regulation B, which many bankers oppose as added regulatory burden, have languished since last April 19, when new Community Reinvestment Act rules were adopted.

In a compromise with the White House, the Fed agreed to change its equal credit opportunity rules if the administration dropped demands for mandatory collection of race and sex data under the CRA.

The Fed proposed the changes but never followed through.

Community activists are hoping President Clinton's nominees to the board - White House Budget Director Alice Rivlin and Washington University professor Laurence Meyers - will provide the edge needed to get the voluntary reporting approved.

The Fed board has changed a lot in the last 10 months. Former banker John P. LaWare resigned, and if Ms. Rivlin and Mr. Meyers are confirmed, as expected, Clinton appointees would hold three of the Fed's seven seats. (Four if Fed Chairman Alan Greenspan is included. Mr. Clinton just renominated Mr. Greenspan.)

The Rev. Charles Stith, national president of the Organization for a New Equality in Boston, and Robert Gnaizda, general counsel of the Greenlining Institute in San Francisco, pressed Mr. Greenspan in a meeting late last month to finish the regulation.

"I don't believe Greenspan opposes it," Mr. Gnaizda said in an interview after the meeting. He said he expects the change to take effect next Jan. 1.

Mr. Greenspan and other members of the Fed will not comment on matters pending before the board.

Mr. Gnaizda said he told Mr. Greenspan that the six largest banks in California, including Wells Fargo and Bank of America, want the power to collect race and sex information so they can prove the diversity of their small-business portfolios. …

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