(a) Definitions. For purposes of this section, the following terms
shall have the following meanings:
(1) Involved
in making any determination concerning a covered application from
a small business means participating in a decision regarding
the evaluation of a covered application from a small business or the
creditworthiness of a small business applicant for a covered credit
transaction.
(2) Should have access means that an employee
or officer may need to collect, see, consider, refer to, or otherwise
use the information to perform that employee’s or officer’s
assigned job duties.
(b) Prohibition on access to certain information. Unless the exception
under paragraph (c) of this section applies, an employee or officer
of a covered financial institution or a covered financial institution’s
affiliate shall not have access to an applicant’s responses
to inquiries that the financial institution makes pursuant to this
subpart regarding whether the applicant is a minority-owned business,
a women-owned business, or an LGBTQI+-owned business under section
1002.107(a)(18), and regarding the ethnicity, race, and sex of the
applicant’s principal owners under section 1002.107(a)(19),
if that employee or officer is involved in making any determination
concerning that applicant’s covered application.
(c) Exception to the prohibition
on access to certain information. The prohibition in paragraph
(b) of this section shall not apply to an employee or officer if the
financial institution determines that it is not feasible to limit
that employee’s or officer’s access to an applicant’s
responses to the financial institution’s inquiries under section
1002.107(a)(18) or (19) and the financial institution provides the
notice required under paragraph (d) of this section to the applicant.
It is not feasible to limit access as required pursuant to paragraph
(b) of this section if the financial institution determines that an
employee or officer involved in making any determination concerning
a covered application from a small business should have access to
one or more applicants’ responses to the financial institution’s
inquiries under section 1002.107(a)(18) or (19).
(d) Notice. In order to satisfy the
exception set forth in paragraph (c) of this section, a financial
institution shall provide a notice to each applicant whose responses
will be accessed, informing the applicant that one or more employees
or officers involved in making determinations concerning the covered
application may have access to the applicant’s responses to
the financial institution’s inquiries regarding whether the
applicant is a minority-owned business, a women-owned business, or
an LGBTQI+-owned business, and regarding the ethnicity, race, and
sex of the applicant’s principal owners. The financial institution
shall provide the notice required by this paragraph (d) when making
the inquiries required under section 1002.107(a)(18) and (19) and
together with the notices required pursuant to section 1002.107(a)(18)
and (19).
