Answer:
For the past decade there has been a constant stream of enforcement actions against financial institutions for engaging in redlining. Redlining occurs when financial institution practices result in the restriction of lending in a particular geographic area, quite frequently a low-income or a high minority population area. Now 1071 data will give new insight and risk to fair lending and CRA when the data becomes public.
On March 30, 2023, the Consumer Financial Protection Bureau (CFPB) published an 888-page final rule to implement Section 1071 of the Dodd-Frank Act. That section amends the Equal Credit Opportunity Act (ECOA) to require financial institutions to collect and report certain data in connection with credit applications made by women, minority, and/or LGBTQI+ owned businesses and small businesses. New data means new analysis which may indicate disparities in your lending practices.
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Learn more about Robin Boatwright’s, Fair Lending, CRA, and Small Business Loan Data Filing webinar.
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