(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).
