Section 1071 Proposal Questions
Be sure to JOIN US on November 23, 2021, for our webinar, “Small Business Lending Data Collection – Deep Dive”.
We’ve learned quite a bit since the Section 1071 proposal (aka Small Business Lending Data Collection) was published.
Many may be putting this on the back burner since it’s “just a proposal”, but it is coming one way or another. Here are a few questions we’ve received that might help shed some light on how this proposal may affect your institution.
Question: The exclusions to the 1071 rule include business credit secured by rental or investment property, which includes 1-4 family dwellings. What if the property being rented to others is an apartment building? Is it treated differently than the 1-4 family dwelling type?
Answer: Yes, loans secured by multifamily dwellings (i.e., having five or more units) would be covered under the rule.
Question: Who’s prohibited from viewing the information protected by the Firewall?
Answer: Anyone who is involved in making any determination on an application is generally prohibited from seeing whether an applicant is a minority or women-owned business and the demographic information of the principal owner(s). These decision-making individuals can only have access to the information if it’s determined they …may need to collect, see, consider, refer to, or otherwise use…it to perform their job duties.
Question: If you are currently a large bank for The Community Reinvestment Act (CRA), will this reporting replace the current March 1st small business reporting or will it be in addition to?
Answer: The 1071 reporting requirement would not replace any other reporting requirement, under CRA, HMDA, or otherwise. The CFPB specifically requests comments on any duplicative, overlapping or conflicting reporting requirements, but also acknowledges that CRA reporting only provides a portion of the information the Section 1071 rule will.
Published
2021/11/15
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!