U.S. Rep. Barney Frank, D-Newton, long has been interested in having access to race and gender data for business loan applicants.

Business lenders could find themselves in the same shoes as their home mortgage-lending counterparts, who are required to collect and report race and gender data about loan applicants to their regulators, if U.S. House Financial Services Committee Chairman Barney Frank, D-Newton, has his way.

Last month, Frank and two of his committee colleagues wrote to the Government Accountability Office asking it to review the U.S. Equal Opportunity Credit Act (ECOA)’s Regulation B, which presently prohibits business lenders from collecting the same data.

“We request that the GAO review the impact of removing [that] prohibition,” he and committee members Reps. Melvin Watt, D-N.C., and Carolyn Maloney, D-N.Y., wrote in their July 16 letter to GAO head David M. Walker.

They are asking the agency to assess the Federal Reserve Board of Governors’ contention that lifting the prohibition could increase the risk of discrimination against women and minority business loan applicants, and determine the likely costs of requiring lenders to collect and publicly report race and gender information about non-mortgage applicants.

The request “is clearly an attempt to gather data to make a case” that public reporting of such data for business loan applicants will lessen discrimination against certain applicants, said Jon Skarin, the Massachusetts Bankers’ Association’s director of federal legislative and regulatory policy.

“I think the assumption on [Frank’s] part and the members who have signed on is that the data would support it.”

Frank long has been interested in having access to race and gender data for business loan applicants, Skarin said.

Indeed, the congressman has tried at least twice to get the Federal Reserve Board of Governors to lift the prohibition against collecting it. The Fed wrote and has promulgated the Home Mortgage Disclosure Act, which requires most mortgage lenders to disclose race, gender and income data for home loan applicants, as part of ECOA, which was adopted in 1975. It has the authority to impose similar requirements on business lenders.

“[A]ccess to this data could lead to more business lending to minorities and women,” Frank and 22 Financial Services Committee colleagues wrote to then-Fed Chairman Alan Greenspan in 2004.

“We believeÂ…the positive impact of the data collection and disclosures required under Â… the Home Mortgage Disclosure Act is a good example of the benefits of greater transparency of data about loan applicants’ personal characteristics,” he and four colleagues wrote in a similar request to Federal Reserve Board Chairman Ben Bernanke, Greenspan’s successor, in February.

“[C]ollecting and publicly reporting race and gender data on applicants for small-business loans could lead to increased lending to women- and minority-owned businesses in the same way that the HMDA disclosures resulted in more home lending to women and minorities,” they suggested in that letter.

Bernanke and Greenspan each replied that permitting lenders to collect and use such information, for reasons other than a self-test of ECOA compliance, could lead to the risk that it would be used to discriminate against some applicants.

In addition to those concerns, Bernanke wrote, the Fed also was concerned that permitting voluntary data collection would not produce useful data, since its consistency could not be assured without set standards and methods.

A Crushing Burden

Banks say that new reporting requirements would only increase an already crushing compliance burden, with questionable benefits.

“I would, as a banker, but also as a taxpayer, ask, ‘Why are you asking for this?'” said David Falwell, Middlesex Savings Bank’s chief lending officer.

“Data collection comes at a cost,” he said, and Middlesex Savings Bank already has a double-review process in place for every business loan to ensure that they are offered in a “consistent, sound and objective” matter.

Many times, the final approving body never meets an applicant, he noted, and names listed on applications often aren’t clearly those of a man or a woman.

But Sheila Murphy, chief operating officer of the Center for Women and Enterprise, a Boston nonprofit that trains women entrepreneurs, said if race and gender data for business loan applicants were available, it could “shine a spotlight on an issue that may need attention,”

“Our experience is not that there are bankers who are outright discriminating,” she said. “ButÂ….people say that you get what you measure.”

One existing measure, she said, is the U.S. Small Business Administration’s loan portfolio, which shows “significantly more male-owned companies with SBA loans, despite the fact that women start businesses [at least twice as often] as men.”

The SBA guaranteed 13 percent of approximately $2.8 billion in small-business loans (loans less than $1 million) originated in Massachusetts in 2004.

The federal agency also has reported that most businesses don’t get start-up financing from banks. Just 22 percent of all U.S. businesses, and 19.5 percent of women-owned businesses, used a bank loan for start-up costs in 2002, according to its survey of business owners that year.

Murphy said that as a nonprofit, CWE knows about the cost and burdens of compliance.

“We sympathize [with banks] on that,” she said.

Neither Frank nor a Boston Federal Reserve Bank spokesman could be reached for comment about Frank’s proposal, but the Newton Democrat appears to be set on seeing it through.

In his February letter to Bernanke, he wrote that he is aware that Congress could require lenders to collect and publicly report data on small-business lending. But, he noted, former Federal Reserve Board member Jeffery Bucher said in 1975 – when ECOA was adopted – that the board should be prepared to amend its regulations “‘promptly as may prove necessary in the light of experience.'”

The GAO, which works for Congress, has been asked to produce its report by next spring. It would not compel the Federal Reserve to act to allow the data collection and reporting, Skarin said.

But the agency’s research is “pretty well-respected,” he noted, and it “definitely carries some weight” on Capitol Hill.

A 2006 GAO report, “Financial Services Industry: Overall Trends in Management-Level Diversity and Diversity Initiatives, 1993-2004,” found that “minority- and women-owned businesses have generally faced difficulties in obtaining access to capital for several reasons,” but found that reasons could include the fact that many proposed businesses are concentrated in service industries, and lack assets to pledge as collateral.

“Other studies suggest that lenders may discriminate in providing credit, but assessing lending discrimination may be complicated by limited data availability,” study authors wrote, while noting that some financial institutions, primarily commercial banks, said they have developed strategies specifically to serve minority- and women-owned businesses.