Driver's License Image on Core-Reg B Issue?

Posted By: Timex

Driver's License Image on Core-Reg B Issue? - 09/07/21 04:49 PM

I have read the history of this topic, but I have not seen a definitive decision, so I'm hoping we can settle this for everyone. Our core system displays driver's license images we have uploaded in connection with each customer's CIF file. Our Operations side has been uploading the DL images in connection with new deposits. It was always my understanding that to comply with Reg B we should not have copies of DLs in the loan files, so we used to keep a separate binder of DLs. Now with imaging capabilities, the DL image appears for all inquiries. I checked with our core provider, and there is no way to prevent loan originators from seeing the DL images (it's either all images or no images). In this modern age of imaging and enhanced core systems, is there now any regulatory tolerance for these DL images appearing on all employee inquiries? If not, how are other banks complying with Reg B? Are other banks just not uploading any DL images?
Posted By: InFairness, CRCM

Re: Driver's License Image on Core-Reg B Issue? - 09/07/21 04:56 PM

Why do you need the images of the driver's licenses? Is there a reason you're not just retaining the state and license number? If you retain the images, and the loan officers/underwriters can see them, it will be hard to prove no one used the demographic information on the licenses in an inappropriate manner.
Posted By: Timex

Re: Driver's License Image on Core-Reg B Issue? - 09/07/21 05:04 PM

Used by tellers to verify identity when the person is at the window.
Posted By: Cowboys Fan

Re: Driver's License Image on Core-Reg B Issue? - 09/07/21 07:13 PM

What system are you using for imaging? I know that if you use Fiserv Director you can limit who can see certain images based on the doc type and the security group the user belongs to so a teller could see images that a loan officer couldn't.
Posted By: Timex

Re: Driver's License Image on Core-Reg B Issue? - 09/07/21 07:26 PM

Jack Henry. I confirmed with them that is not possible before posting this question since that would have been the easy solution. I can't believe we are the only bank that scans DL images. If so, it was nice of Jack Henry to create a feature that we are the only bank to use.
Posted By: rlcarey

Re: Driver's License Image on Core-Reg B Issue? - 09/07/21 07:40 PM

ID are scanned all the time into the system for teller use. The fair lending risk is minimal unless you have a rogue loan officer and I hope that you would have other methods to catch discriminatory lending. I would not lose a minute of sleep over it.
Posted By: CompliantOkie

Re: Driver's License Image on Core-Reg B Issue? - 09/07/21 08:14 PM

Agree with Randy. Our core has images of IDs on file and has for years. Never had a fair lending issue.
Posted By: Rocky P

Re: Driver's License Image on Core-Reg B Issue? - 09/08/21 12:38 AM

In many fair lending exams, the question was do the underwriters have access to drivers licenses. Since they were kept on the deposit rather than loan systems, the answer was no.
Posted By: Inherent_Risk

Re: Driver's License Image on Core-Reg B Issue? - 09/08/21 11:00 AM

I don't even think access is an issue. If you have underwriters going out of their way to look at driver's licenses while making credit decisions, the problem isn't the access, and the answer isn't reconfiguring your whole system to try and stop the access.

That said, I do think having an underwriting process that forces the underwriter to view a picture of the borrower in order to complete their decisioning process COULD draw some examiner scrutiny. If they have to do an inquiry in your core, and that will force them to see the applicant, I could see some examiner's having issues with that process.
Posted By: InFairness, CRCM

Re: Driver's License Image on Core-Reg B Issue? - 09/08/21 01:23 PM

Originally Posted by Inherent_Risk
That said, I do think having an underwriting process that forces the underwriter to view a picture of the borrower in order to complete their decisioning process COULD draw some examiner scrutiny. If they have to do an inquiry in your core, and that will force them to see the applicant, I could see some examiner's having issues with that process.

I've had two exams where something similar became an issue. One was MLOs having access to scanned drivers' licenses and the other was underwriters have access to social media information used in fraud screens for online applications for unsecured consumer credit. In both instances, the examiners wanted to know how ensured the lenders did not use the information, since they could see it.
Posted By: rlcarey

Re: Driver's License Image on Core-Reg B Issue? - 09/08/21 01:57 PM

Right and every new customer goes through CIP too - so they see the individual's ID then whether they scan it or not - not to mention that I would think that during the application interview a loan officer might notice that the applicant was black or female or disabled that was sitting in front of them. The issue is not and never has been whether or not the information is available to them, it is solely based on whether they use it in a discriminatory manner. Unless an examiner can prove that is happening then everything else is just them beating their chests.
Posted By: Annie

Re: Driver's License Image on Core-Reg B Issue? - 09/14/21 04:15 PM

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