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, join us for the lending portion of our Virtual Lending Compliance Conference Series and our Small Business Lending Data Collection webinar!
Diane joined Banker’s Compliance Consulting with over 10 years of compliance experience and over 15 years of experience within the financial industry. Diane is a Certified Regulatory Compliance Manager (CRCM) and has a Bachelor’s Degree in Sociology with a concentration in Criminal Justice. She is a graduate of the Schools of Banking Compliance School and has participated in various other training opportunities throughout her career. Diane understands firsthand the struggles banks face in building and maintaining successful compliance programs. Her experience and common sense approach to consumer compliance is a great asset to our clients.
Diane and her husband have two kids who keep them busy. She enjoys running and other sports and is a big Bugs Bunny fan! She’s a bit crazy in that she does enjoy reading some of these regulations and she’s a “crazy cat lady!” Her cat tales are hilarious!