• Tue. Jun 6th, 2023

CFPB points small enterprise lending compliance information | Orrick, Herrington & Sutcliffe LLP

ByEditor

May 25, 2023

The CFPB not too long ago issued a compliance information for its ultimate rule implementing Part 1071 of the Dodd-Frank Act. In step with Part 1071, the ultimate rule (issued on the finish of March) would require monetary establishments to gather and supply to the Bureau knowledge on lending to small companies, outlined as an entity with gross income underneath $5 million in its final fiscal yr (coated by InfoBytes right here). The information: (i) features a detailed abstract of the ultimate rule’s necessities, together with knowledge reporting deadlines; (ii) supplies complete data on the varieties of knowledge monetary establishments want to gather and report on small enterprise lending functions and selections; and (iii) contains parameters for coated establishments and coated originations. The information additional breaks down reportable knowledge factors and explains the ultimate rule’s “firewall” provision, which states that staff and officers of a monetary establishment or its associates “concerned in making any dedication” on a reportable utility are typically prohibited from accessing applicant demographic data referring to ethnicity, race, intercourse, and standing as a minority-owned, women-owned, or LGBTQI+-owned enterprise. The information specifies that sure exceptions might apply to conditions the place an worker concerned in decision-making will need to have entry to the information to satisfy their assigned job duties (e.g. a mortgage officer or mortgage processor). In these conditions, monetary establishments are required to supply discover to candidates that staff and officers concerned in decision-making might have entry to their demographic knowledge.

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