Regulations making it easier to detect discrimination in mortgage loans have been proposed by the Comptroller of the Currency as part of the settlement in a suit brought by the National Urban League in 1976.

The principal new requirements are an application log, race or national origin information, and designation of census tract.

The monitoring system, which will be manatory, will apply to national and D.C. banks financing construction, purchase or home improvements secured by a first lien. A computerized system will facilitate detection of red-lining while minimizing the expense to institutions.

The application log responds to charges by community groups that records of loans granted do not tell a complete story because some people are refused before they ever file a formal request. The log would allow the examiner to search the volume of the bank's loan activity, to locate specific loan files for analysis and to make comparisons between the characteristics of applicants or inquirers and those who were granted loans.

In the past, a large number of applicants have declined to answer the voluntary question on race or national origin. Henceforth, if they do not give their ethnic background, the bank official will be required to provide it "on the basis of visual observation, surnames, or other available information."

All banks in metropolitan areas would be obliged to supply census tract information. A census tract is the only geographic unit for which income and racial data are consistently available and that can be used manually or by a computer to detect red-lining. In remarks with the proposals, the Comptroller recognized this would place an added burden on some but declared that, balanced against the benefits, "it appears to be in the best interests of furthering the goals of the fair housing compliance system."

The goal of these regulations is to provide adequate recordkeeping information to enable examiners to determine compliance with the Fair Housing and Equal Credit Opportunity Acts. To minimize costs, banks with a large colume of home loans would be required to submit a statistical sample of applications including the above information before examination. Where no problems are discovered the examination time would be reduced.

The National Urban League's attorneys worked together with the banking agencies to develop the regulations.