Citing concerns from banks of all sizes, Reps. Blaine Luetkemeyer (R-Mo.), French Hill (R-Ark.) and Roger Williams (R-Texas) raised several issues and called on the CFPB to remedy these issues within the final rulemaking.

“Any information collected by the bureau under this provision relies on racial stereotypes and would render all 1071 information tainted and inaccurate,” they stated in a letter. “Loan officers at financial institutions have no expertise to determine the race or ethnicity of individuals, nor should they. Loan officers should be focused on the credit worthiness of borrowers when examining loan applications, not determining if their last name indicates they are a minority.”

In particular, the lawmakers expressed concerns about the potential effects of the rule on small banks and urged the CFPB “to exclude as many small financial firms as possible.” They also called for a longer implementation period, given the complexity of the rule.

The lawmakers also urged the bureau to fully disclose what information will become public before the final rule is issued and to conduct a separate rulemaking process, including notice and comment.

“Announcing what information you will be making public well after you collect initial 1071 information is a backwards approach to rulemaking,” they wrote.

The lawmakers’ concerns echoed several previously raised by the American Bankers Association and the state bankers’ associations in their comment letter to the bureau last month.

Section 1071 requires the CFPB to collect data about small-business lending to facilitate enforcement of fair lending laws and to help identify business and community development needs and opportunities.

The bureau’s proposed new rule would, if finalized, amend Regulation B to implement changes to the Equal Credit Opportunity Act made by Section 1071. The bureau is proposing to require covered financial institutions to collect and report data on applications for credit for small businesses, including those owned by women or minorities. The bureau’s proposal also addresses its approach to privacy interests and the publication of Section 1071 data; shielding certain demographic data from underwriters and other persons; recordkeeping requirements; enforcement provisions, and the proposed rule’s effective and compliance dates.