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"Blocking" Lenders from Viewing Documents

We are now scanning all of our deposit and loan documents for our customers. Is there any reason to "block" our lenders from viewing all the documents - such as a drivers license? Currently our lenders are blocked from viewing all deposit documents as well as CIF documents - signature cards, resolutions, trusts, drivers license, etc. Our lenders are required to capture the information from the drivers license when completing the loan application. I can remember back when we had loan files that we weren't allowed to keep a copy of the DL in the file. But now that they are scanned, do they need to be "blocked" from certain employees for viewing?

Answer by Kathleen Blanchard:

There is no valid reason for blocking lenders from viewing deposit documents, including licenses. This is an old wives' tale perpetrated by some exam teams that feel that lenders might "see" race and gender and that increases fair lending risk.

Lenders often meet customers, and speak with customers, and are therefore privy to the same information. Financial institutions do not blindfold staff or refuse to allow them to speak to customers.

Fair lending training should be in place and ongoing monitoring should be sufficient to determine if any particular lenders have unusual patterns of lending decisions. That is the case that should be made to auditors and regulators.



Answer by Andy Zavoina:

It was many years ago now that in a totally uncoordinated act, when copies of a DL was a really hot issue, reps from each banking agency were asked separately about this at an ABA annual compliance conference. While they said keeping them separate was not a bad idea, none said it was a prohibited practice.

The question I would ask is why is it necessary to "block" so many documents from one side of the bank or the other? Is this creating needless work, or is there no access needed? If one side had access to view, does that provide other accesses they don't need, automatically? My point is, don't create work needlessly, especially if access is needed from time to time.

First published on 01/17/2016

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