Now that we have a proposed rule for the small business data collection requirements under Section 1071 of The Dodd-Frank Act, you may be starting to consider the potential impact to your institution. If so, be aware of what the CFPB refers to as the “firewall”. This generally prohibits anyone involved in making a decision on a small business credit application from having access to certain protected data. This protected data includes whether a business is minority or women-owned and the owners’ demographic information. If it’s determined individuals involved in the decision should have access to the information, notice would need to be provided.
Determining who should have access to this protected data would need to be made on an individual or job-specific basis. For example, it may be determined that loan officers should have access to the information because they may help collect it.
Of course, keep in mind, all we have at this point is a proposal and certain details can change. However, the Act itself requires certain data be protected. While you may not need a solution for a while, you likely will eventually. To learn more about section 1071 of the Dodd-Frank Act, join us for the lending portion of our Virtual Lending Compliance Conference Series and our Small Business Lending Data Collection webinar!
Published
2021/09/09