The practice was reported last week by ProPublica, which took out a housing ad to show how it could exclude potential buyers with African American, Asian American or Hispanic "ethnic affinities." While Facebook doesn't collect racial data, its algorithms can essentially guess ethnicity based on your activities and interests.

Facebook defended the practice, telling USA Today that "multicultural marketing is a common practice in the ad industry and helps brands reach audiences with more relevant advertising." However, it added that "we've heard from groups and policy makers who are concerned about some of the ways our targeting tools could be used by advertisers. We are listening and working to better understand these concerns."

With two percent of Facebook's US employees being African American, and four percent Hispanic, we remain convinced that a stronger commitment to diversifying the ranks of your company, especially in senior management positions ... will help in ensuring that innovative and inclusive platforms continue to be promoted by your company.

Facebook has been criticized for failing to improve its ethnic diversity, as the percentage of African-American and Latino workers hasn't budged since 2014. The Congressional Black Caucus members, including Reps. Robin Kelly, Yvette Clarke, Emanuel Cleaver and CBC Chair G.K. Butterfield, feel that may be part of the problem.

"With two percent of Facebook's US employees being African American, and four percent Hispanic, we remain convinced that a stronger commitment to diversifying the ranks of your company, especially in senior management positions ... will help in ensuring that innovative and inclusive platforms continue to be promoted by your company," they wrote.

As ProPublica points out, publishers like Facebook can be sued over racially biased ads, even though they're not directly responsible for the content. For instance, The New York Times went to court in 1989 over violations of the Fair Housing Act, and was forced to pay damages and change its policies. It now reviews ads for racially biased phrases, and forces housing advertisers to use pictures of people that are "representative of the racial makeup in the metropolitan area."

The Black Caucus wrote that "it is our strong desire to see Facebook address this issue immediately," and asked the social network to outline steps it's taking to prevent "discriminatory housing practices."