Section 1071 Firewall: Employees Involved in Making a Determination
Section 1071 requires a “firewall” in order to prohibit employees …involved in making any determination concerning a covered application…from being able to access demographic information regarding the applicant’s principal owners. So, what does “involved in making a determination” mean? Essentially, it’s anyone participating in the evaluation of a covered application or the creditworthiness of a covered applicant. This could include those employees (whether individually or in a group) that:
- Make approval or denial decisions (or determine the reasons for denial)
- Determine whether a counteroffer is appropriate and/or the terms of such counteroffer
- Participate in loan committee decisions
- Act as underwriters
- Determine requirements for collateral and/or guarantors
- Set credit amounts, limits or terms
- Recommend to others whether an application should be approved or denied
The Rule also provides examples of activities that do not constitute being “involved in making a determination”. Join us to learn more!
Published
2025/03/31
Jerod Moyer
Jerod is the leader of Banker’s Compliance Consulting’s training productions. He is a nationally recognized speaker. Whether it’s a conference, seminar, school, webinar or luncheon, it’s easy to stay engaged when he presents due to the amount of passion and energy he brings to each and every compliance topic. Jerod has spoken on behalf of the American Bankers’ Association, BankersOnline, many state banking associations, private compliance groups and financial institutions. He is a Certified Regulatory Compliance Manager (CRCM) and BankersOnline Guru. Jerod likes to spend his time (between reading regulations and producing compliance training!) relaxing at the lake with his wife and three children, following their activities or engaged in something sports-related!