Libertarian Party Press Release
18 November 1999
NEWS FROM THE LIBERTARIAN PARTY
2600 Virginia Avenue, NW, Suite 100
Washington DC 20037
World Wide Web: http://www.lp.org/
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For release: November 18, 1999
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For additional information:
George Getz, Press Secretary
Phone: (202) 333-0008 Ext. 222
E-Mail: Ggetz@Compuserve.com
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Federal agency wants to encourage banks to ask customers about race, gender
WASHINGTON, DC — The Federal Reserve Board is quietly trying to enact a proposal called Regulation B, which would encourage banks to label customers by race, gender, and ethnic background before approving their loans, the Libertarian Party warns.
“There’s only one way to describe Regulation B: Backward,” said Steve Dasbach, national director of the Libertarian Party. “Race should have no more to do with who gets a loan than it once did in deciding where people could sit on a bus. This embarrassing throwback to the Jim Crow era should be withdrawn immediately.”
Regulation B would amend the Equal Credit Opportunity Act to “encourage” banks to collect data on the race, religion, gender, and national origin of anyone applying for an auto loan, credit card, or personal loan. The collection of such data has been illegal since 1976, but the Federal Reserve is trying to reverse that policy.
“In a colorblind society, banks judge people not by the color of their skin, but by the content of their credit application,” Dasbach said. “But that’s not what’s going to happen the next time you apply for a loan if Regulation B goes through.
“Instead of discussing whether you’re financially qualified, be prepared to explain whether you’re racially qualified. You could also face questions about your religious views and ethnic background, such as whether you’re Asian, a Pacific Islander, or an Eskimo.
“Perhaps the most repugnant part is that if you refuse to answer, the loan officer would be required to make their own assessment ‘based on skin tone and facial characteristics.’ ”
Ironically, Dasbach said, the driving forces behind Regulation B are some of the same groups that once opposed such racial profiling, such as the National Black Chamber of Commerce and the ACLU. Egging them on are trial lawyers, who stand to reap millions by using the racial data to show that banks have discriminated by awarding a disproportionate number of loans to certain groups.
“Program by program, quota by quota, politicians keep trying to pit Americans against each other by race — and greedy lawyers are only too happy to cash in,” Dasbach said. “In the aftermath of the attack litigation against tobacco companies, gun makers, and Microsoft, there’s blood in the water — and banks are the next likely target.”
Fortunately, it’s not too late to kill Regulation B, Dasbach said. After a brief public comment period, the Federal Reserve Board remains undecided, and a final decision is expected by early Spring.
The Libertarian Party is fighting the proposal along with some of the same organizations that helped it quash the FDIC’s so-called Know Your Customer rule earlier this year, including the Free Congress Foundation, Eagle Forum, U.S. Rep. Ron Paul (R-TX), the Independent Community Bankers of America and other banking organizations.
“Now’s the time to bury Regulation B,” Dasbach said. “Let’s inundate Congress and the Federal Reserve with letters, faxes, and phone calls in opposition to this pernicious proposal.
“Regulation B isn’t only unjust; it’s unnecessary. In a free market, the only color that matters is green. Any bank foolish enough to discriminate virtually guarantees that qualified minority applicants will take their business elsewhere, and even invites massive consumer boycotts.
“In other words, the free market already imposes a stiff price for racism — without dragging America backward on civil rights.”