Small Business Lending Data Collection (Regulation B)

On March 30th, the Consumer Financial Protection Bureau (CFPB) issued a Final Rule to amend Regulation B. Specifically, it is intended to bring Section 1071 of The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) to fruition. The Dodd-Frank Act was passed way back in 2010. It called for changes to the Equal Credit Opportunity Act (ECOA) with respect to collecting and reporting certain data on small business credit applications, including those that are minority-owned and women-owned. It also calls for safeguarding the data, shielding it from certain persons within the loan process, recordkeeping requirements, and more.

The intent of these changes is to identify and address fair lending concerns as well as community development needs and opportunities.

It is imperative that compliance personnel and management understand the potential ramifications for their institution’s current policies, procedures, and processes going forward.

Impact

Many financial institutions are already subject to other regulations that require them to collect and/or report certain loan and/or loan applicant data. Some include the Equal Credit Opportunity Act, Home Mortgage Disclosure Act, Community Reinvestment Act, Beneficial Ownership rules, etc. While that may help some better understand data collection/reporting as a whole, the data that will need to be collected/reported under Section 1071 is different than other requirements. Further, collecting/reporting data under yet another rule is likely to cause even more confusion.

Thought Leadership & Implementation Group

The new Section 1071 requirements are intended to, in part, shine a light on commercial loans and fair lending. The implementation process and mandatory compliance date may seem like a long way out, but in “compliance time,” it will seem much shorter than it appears and will come faster than you think!

What steps have you already taken to prepare? What are your next steps?

We’ve been down this road before and want to help you eliminate those uneasy feelings. We’ll have top-notch webinars as always, but we’ve also come up with something special just for 1071! The Banker’s Compliance Consulting Team has put together a program to help guide you through the 1071 implementation and planning process. The concept is simple; we want to partner with you and your peers through a thought leadership, implementation, and planning membership group and turn the complexities of the 1071 requirements into plain English!

Banking on BBC Magazine

The Banking on BCC Magazine is a must-have for any compliance professional. This monthly, subscription-based electronic magazine is always chock-full of valuable compliance information. We cover a variety of lending, deposit, and BSA compliance topics, from recent developments to revisiting areas that have maybe fallen off your radar. Each month, in addition to great articles, we feature a Q & A Corner which highlights a few compliance questions we’ve recently received. There are also regular features such as BSA Bits & Pieces, Management Minute, Field Notes, and a Training Spotlight.

Monthly Connection

The Monthly Connection is yet another way to stay up-to-date on issues related to collecting small business loan data and interacting with your peers in the compliance industry. While we talk about a wide variety of topics each month, there is ample time to ask questions of our experts and your peers. We have always said, “Compliance is not competitive.” and our Monthly Connection is a way for compliance people to help other compliance people.
We began discussing the proposal in our September 2021 Monthly Connection.

There is no one-size-fits-all approach to a financial institution’s training wants and needs. That said we do recommend some variety in the methods you choose. Variety will not only help your budget but will also give you different viewpoints. Maybe you attend an in-person conference every few years and then fill in any gaps with webinars. Maybe you follow our blog to monitor major regulatory developments and look to our magazine for more in-depth analysis. The point is, you can tailor training to your wants and needs.

Access Our Bankers Library for the Small Business Lending Data Collection (Regulation B) Training