1071 Proposal Information: New Rules

This clip is from “Small Business Lending Data Collection – Deep Dive” webinar.

1071 Information – Video Transcript:

The women and minority-owned status, ethnicity, race, and sex. And here’s where I need you to forget what you know about HMDA, forget what you know about Reg B and how you collect similar information with those rules.

Proposal 1071 means a new set of rules.

And the time that we’re living in now, things have changed just in the short time since they last rewrote HMDA. The world’s changed, and the view on some of the data we’re collecting, especially as it relates to gender and things like that. And so, a new set of rules. Let’s take a global view here of minority and women-owned business status.

This is information you’re going to be collecting on a form.

They give you a model form. It’s a two-page model form. One page is for women and minority-owned status; the other is for race, sex, and ethnicity. I will highly encourage you to use the model form when it comes out. We have the proposed version that we’re talking through today, but I will encourage you to use that model form. Keep in mind, we’ve alluded to it, but here’s where the rubber meets the road. This information must be separate from your other application information. All the things we’ve talked to up to this point, if you’re going to have a paper application or a paper data collection form, the information up to this point must be separate from what we’re about to go through.

They cannot be on the same form or part of the same form. That’s why we have the model form here. If you combine them, the Fannie Mae 1003 has all that home loan information on one form; it’s 27 pages long, but it’s all one form; this can’t be that way. Okay. The information can all be on one piece of paper up to this point. The information we’re going to do from here out has to be separate. So, women and minority-owned status. Here’s how it works. Just generally speaking. You must make the request. If you use the model form, the request is there even if you take an application over the phone. The request states that you are required by federal law to ask for the following information.

And then there’s a disclaimer that needs to be provided to the applicant that indicates to them that while you must request this information, they don’t have to provide it. If it happens in person, you can slide the form across the desk and read it for themselves. But if it’s over the phone, in other words, not in person, you’re going to have to read all this to them. You’re going to have to tell them that federal law requires you to ask for this information, and you’re going to want to read that verbatim. And then you’re going to provide the disclaimer that says they don’t have to provide you the information that you’re about to seek from them. Make sure you build that into your procedures. Remember, this must be separate.

Published
2021/12/08