---
title: "Section 1071: Number of Principal Owners"
description: Learn about the importance of collecting data on the number of principal owners for Section 1071 compliance. Understand the key differences and avoid violations by following clear procedures.
---

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# [Section 1071: Number of Principal Owners](https://blog.bankerscompliance.com/en/section-1071-number-of-principal-owners)

 Written by [Jerod Moyer](https://blog.bankerscompliance.com/en/author/jerod-moyer) | May 3, 2024 1:32:24 PM

When it comes to Section 1071 data collection and reporting, there are some similarities with other regulations, like [Regulation B](https://www.consumerfinance.gov/rules-policy/regulations/1002/), [HMDA](https://www.consumerfinance.gov/data-research/hmda/), [Beneficial Owners](https://www.fincen.gov/boi-faqs), 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.

Published  
2024/05/04

 

[View full post](https://blog.bankerscompliance.com/en/section-1071-number-of-principal-owners)

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