Section 1071: Number of Principal Owners

When it comes to Section 1071 data collection and reporting, there are some similarities with other regulations, like Regulation B, HMDA, Beneficial Owners, etc., but also many differences. Thus, it’s important that your procedures for Section 1071 be clear and spell out when the information is to be collected. On the first page of the two-page model collection form, you are required to ask for the number of principal owners for the small business. This is an important step as it will determine on whom you must collect demographic information (page two of the model collection form). A few things to remember:

  • The principal owners may or may not be applicants (as defined by Regulation B, HMDA, etc.)
  • The principal owners (25% or more direct ownership) may not always be the same as the beneficial owners.
  • There could be situations where there are no principal owners.

Not understanding this can lead to violations because you can only request demographic information when specifically allowed by regulation.

Jerod explains more in the video.

1071 Resources!



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!

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Section 1071: Number of Principal Owners