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October 30, 2002<\/p>\n
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, NW
Washington, DC 20551<\/p>\n
re:\tEqual Credit Opportunity Act – 64 FR 44582 (August 16, 1999) Docket No. R-1008<\/p>\n
Dear Sir or Madam:<\/p>\n
It has been brought to our attention that the Federal Reserve will soon be revisiting a 1999 proposal to change aspects of Regulation B to allow for voluntary collection of \u201cracial\u201d data on non-mortgage related loans. Speaking for the American Civil Rights Institute, a national civil rights organization created to educate the public about racial and gender preferences, and The Multiracial Activist, an activist journal covering civil liberties issues of interest to biracial\/multiracial individuals, interracial couples\/families and transracial adoptees, we are inclined to comment on the proposal issued by the Board of Governors of the Federal Reserve System to revise Regulation B, the implementing regulation for the Equal Credit Opportunity Act (ECOA).<\/p>\n
This proposal, while obviously introduced with the best of intentions, could not have come at a worse time. Our nation, with its tortured history of \u201crace\u201d relations, is currently in a state of dismantling the way we view \u201crace.\u201d Much of this change has been facilitated by the rising numbers of \u201cinterracial\u201d marriages and the growing population of \u201cmultiracial\u201d adults and children resulting from the United States Supreme Court decision Loving v. Virginia<\/i><\/a> of 1967, which dismantled the final vestiges of Jim Crow in American bedrooms.<\/p>\n Further, as has been published before in a policy statement by the American Anthropological Association (AAA) and various scientific publications, there is no scientific basis for the concept of \u201crace.\u201d According to the AAA, \u201crace\u201d is purely a sociological and cultural creation with no basis in science. This proposal, sadly, would only serve to further the myth of \u201cracial\u201d classifications, which currently divide people along arbitrary and completely subjective \u201cracial\u201d lines for the purposes of separating individuals into unnatural groupings. If \u201crace\u201d as a static and distinct classification doesn’t exist, how do you continue to count it? This proposal, while well-intentioned, would harm more than help our constituencies by furthering the 18th century concept of static \u201craces\u201d as credible and necessary. As previously stated, during the past Administration, on the White House’s One America website, the goal of the President’s Initiative on Race, launched in 1997, was to strengthen our shared foundation as Americans so that we can live in an atmosphere of trust and mutual respect. The best way to do this is by abandoning the concept of \u201cracial\u201d categorization altogether, rather than further entrenching this concept.<\/p>\n The good that is believed to be accomplished through \u201cracial\u201d classification is far outweighed by its toll on our nation. The constituencies we represent consist of people who already have a heightened awareness of the concept of \u201crace\u201d and how they are viewed by society in general. This proposal will only intensify that feeling of dread that occurs when they are confronted with invasive \u201cracial\u201d classification questions while filling out school, medical and other types of forms. We would personally be loath to honestly answer any question regarding \u201crace\u201d on any form related to financial services. The only color that should matter with regard to financial transactions is green. As our constituencies have rebelled against Census classifications, so shall it against these types of invasive classification questions.<\/p>\n The ECOA, as currently enacted makes it unlawful for creditors to discriminate against an applicant in any aspect of a credit transaction on the basis of \u201crace,\u201d color, religion, national origin, marital status, sex, age, and other specified bases. Adding \u201crace\u201d back into the process only heightens the possibility of discrimination and clearly violates the spirit of the law. As more and more people move to the internet to conduct their financial transactions, \u201cracial\u201d discrimination in financial services has become even less of an issue. Further, the proliferation of electronic banking has considerably minimized the possibility of \u201cracial\u201d discrimination. If a financial institution’s employees can’t see you and you don’t volunteer your \u201crace,\u201d color, religion or national origin, how can they discriminate against you based on those factors? The same argument applies to applications completed by mail, fax or over the phone. Each year, more and more people are using those routes rather than visiting their local bank, lessening the prospect of \u201cracial\u201d discrimination.<\/p>\n This proposal, which would eliminate the prohibition on the voluntary collection of \u201cracial\u201d information by financial institutions could also create some serious side effects. Specifically, the possibility of misuse of this voluntarily collected data is enormous. Lawsuits, filed by organizations falsely alleging \u201cracism\u201d with the sole purpose of creating big settlements for their members or clients are of considerable concern. These lawsuits could easily exacerbate serious \u201cracial\u201d tensions in communities already struggling to cope with the changing demographics resulting from the Loving v. Virginia<\/i><\/a> decision among other factors. The backlash from these lawsuits would be directed at those perceived to be responsible in those communities, which would include our constituencies, a most unsettling prospect.<\/p>\n We, as representatives of constituencies this proposal is designed to protect, urge you not to implement it. The drawbacks of this proposal far outweigh the benefits. It’s time to move on from the box-checking that has divided our nation for far too long.<\/p>\n We thank you for your consideration of our views on this proposal. Any questions may be directed to Ward Connerly at 916-444-2278 or James Landrith at 760-875-8547.<\/p>\n \t Ward Connerly
\t \tChairman
\tAmerican Civil Rights Institute
\thttp:\/\/www.acri.org<\/a><\/p>\n