Wed. Jun 7th, 2023

The CFPB lately issued a compliance guide for its final rule implementing Section 1071 of the Dodd-Frank Act. Constant with Section 1071, the final rule (issued at the finish of March) will demand economic institutions to gather and supply to the Bureau information on lending to compact corporations, defined as an entity with gross income below $five million in its final fiscal year (covered by InfoBytes right here). The guide: (i) contains a detailed summary of the final rule’s specifications, such as information reporting deadlines (ii) delivers complete info on the varieties of information economic institutions require to gather and report on compact organization lending applications and choices and (iii) contains parameters for covered institutions and covered originations. The guide additional breaks down reportable information points and explains the final rule’s “firewall” provision, which states that personnel and officers of a economic institution or its affiliates “involved in creating any determination” on a reportable application are commonly prohibited from accessing applicant demographic info relating to ethnicity, race, sex, and status as a minority-owned, girls-owned, or LGBTQI+-owned organization. The guide specifies that particular exceptions might apply to circumstances exactly where an employee involved in choice-creating ought to have access to the information to fulfill their assigned job duties (e.g. a loan officer or loan processor). In these circumstances, economic institutions are essential to supply notice to applicants that personnel and officers involved in choice-creating might have access to their demographic information.

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