Dodd-Frank Act - Small Business Data Collection. This document describes compliance with Section 1071, which requires financial institutions to report on their small business lending to underserved groups.

1. Dodd
Lend
With the
have som
though a
to begin i
discussion
Sec. 10
Section 10
ask a com
business."
manager
the loan a
applicatio
credit dec
this data h
to smaller
institution
institution
decide to
also track
d‐Fran
ding –
hundreds of r
e clarity on th
timetable has
mplementing
n of the possi
071. Sma
071 of the Do
mmercial loan
" This data sh
and prior to s
are not permi
on process. It
cision on the
has been sep
r banks that d
n cannot sepa
n may not dis
not provide t
k that this info
nk & S
(not s
rules still bein
he preliminar
s not been se
g the requirem
ble dilution o
ll Busines
odd‐Frank Act
applicant for
hould be capt
submission fo
itted to ask th
t must be “hid
application. T
arated or seg
don’t have a l
arate this pro
scriminate on
this informat
ormation was
mall B
o bad
ng defined, th
ry Dodd‐Fran
et for complia
ments or wait
of Section 107
ss Data C
t amends the
r the "race, se
tured during t
or approval. T
hese question
dden” from a
The challenge
gregated from
arge number
ocess they mu
the basis of s
ion, which is
s intentionally
Busine
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he Small Busin
k reporting re
ance. Many in
t for addition
71 or complet
Collection
Equal Credit
ex, and ethnic
the initiation
The loan offic
ns, nor can th
nyone within
e is that the f
m the applicat
r of resources
ust provide th
such informa
perfectly acc
y not provide
ss Com
ness Commer
equirements
nstitutions m
al regulatory
te repeal of t
n
Opportunity
city of the pri
of the loan b
cers who will
hey ever view
n the institutio
financial instit
tion process.
s to impose th
he applicant w
tion. Additio
eptable, but t
d by the borr
mmerc
rcial Lending
outlined in Se
ay be on the
guidance. Th
his provision
y Act and requ
incipal owner
by the Sales o
be responsib
this data as p
on who will b
tution must p
This poses a
his separation
with a notice t
onally, the ap
the financial
rower.
cial
industry doe
ection 1071
fence on whe
here is also
.
uires a lender
rs of the
or Relationshi
ble for adjudic
part of the
be making the
present proof
challenge, m
n. If a financi
that the finan
plicant may
institution m
s
ether
r to
p
cating
e
f that
mostly
al
ncial
ust

2. All the da
must also
informatio
Why does
the enforc
identify b
businesse
underserv
We have
portion of
to these s
Compl
Complian
should mo
specific da
Belo
(A
(B
(C
or th
(D
(E
mino
(F
mino
(G
ta must be re
o be made ava
on will be inc
s the Dodd‐Fr
cement of fai
usiness and c
es.” Translatio
ved small bus
heard it over
f the U.S. eco
small business
iance
ce does not s
ove forward w
ata elements
ow are the ini
A) the numbe
B) the type an
C) the amoun
he credit limit
D) the type of
E) the census
ority‐owned,
F) the gross a
ority‐owned,
G) the race, se
eported annu
ailable to any
cluded with th
rank law requ
ir lending law
community ne
on – the goal
sinesses (i.e. t
and over how
onomy and th
ses.
seem to be ov
with impleme
that need to
tial 8 data co
er of the appli
nd purpose of
t of the credi
t approved fo
f action taken
tract in which
or small busi
nnual revenu
or small busi
ex, and ethnic
ally to the Co
member of t
he data.
uire the collec
ws and enable
eeds and opp
is to motivat
the law will m
w small busin
is provision in
verly complex
entation now
o be collected
ollection requ
ication and th
f the loan or o
t or credit lim
or such applic
n with respect
h is located th
iness loan app
ue of the busin
iness loan app
city of the pri
onsumer Fina
the public, up
ction of this d
communitie
portunities of
te financial in
make them pu
nesses are the
n the law wan
x, but the que
or wait for th
?
uirements as d
he date on wh
other credit b
mit applied fo
cant;
t to such app
he principal p
plicant;
ness in the la
plicant preced
incipal owner
ancial Protect
pon request.
data? The ove
s, governmen
f women own
nstitutions to
ublicly accoun
e lifeblood an
nts to ensure
estion is whet
he mandated
defined in the
hich the appli
being applied
r, and the am
lication, and
place of busin
st fiscal year
ding the date
rs of the busi
tion Bureau (
No personal
erall purpose
nt entities, an
ned, minority‐
increase thei
ntable).
nd engine tha
e that credit is
ther financial
d timeline? W
e law1
:
ication was re
for;
mount of the c
the date of s
ness of the wo
of the wome
e of the applic
ness; and
CFPB). This d
identifiable
is to “facilita
nd creditors t
‐owned, and
ir lending to
t drives a larg
s being alloca
l institutions
What are the
eceived;
credit transac
uch action;
omen‐owned
en‐owned,
cation;
data
ate
o
small
ge
ated
ction
d,

3. (H
sect
A
Overall, d
collecting
part of th
data in wh
must be s
To answe
recomme
requireme
you can st
the types
evidence
jumpstart
complianc
and succe
H) any additio
ion.
dditionally, th
efining the in
g the actual da
e application
hichever pres
submitted to t
r the questio
ndation is ab
ents even tho
tart collecting
of data or re
that Section
t on the imple
ce. This will m
essfully report
onal data that
he bank or le
nternal proces
ata does not
process, so it
scribed forma
the CFPB and
n on whether
bsolutely! You
ough the data
g the data im
porting, they
1071 will be s
ementation.
make it that m
t on your por
t the Bureau d
nding institut
sses on how t
seem overly c
t’s a matter o
at should also
d only needs t
r banks shoul
ur origination
a does not ha
mediately. A
y can be imple
significantly m
Waiting until
much more d
rtfolio.
determines w
tion must pre
to collect the
complex. Mo
of adding the
o be straightfo
to be done on
d start the te
ns system can
ve to be initia
Additionally, if
emented incr
modified or re
the last poss
ifficult to upd
would aid in f
eserve this da
e data may ini
ost of this dat
missing data
orward. As m
n an annual b
echnical imple
n be updated
ally collected
f there are ad
ementally. B
epealed, whic
sible moment
date your syst
ulfilling the p
ata for not les
itially be a ch
ta is already b
fields. The r
mentioned ab
basis.
ementation p
with any/all o
. Once a time
dditional regu
Based on rese
ch is another
t will increase
tems, train yo
purposes of th
ss than 3 year
allenge, but
being collecte
reporting of t
ove, the data
process, my
of the
etable is set t
ulatory chang
earch there is
reason to ge
e your risk of
our organizat
his
rs.
ed as
he
a
then
ges to
little
t a
non‐
tion

4. Finally, fro
view into
segment i
the requir
Summ
In summa
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References:
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