VIDEO: Filling Out the 1071 Data Collection Form
In this Compliance Clip (video), Adam answers a question about who can fill out the 1071 data collection form when there are multiple principal owners of a business opening an account. I other words, can one principal owner answer the demographic questions on behalf of the other principal owners, or do they each need to answer their own questions?
Video Transcript
The following is a transcript of this video.
This Compliance Clip is going to talk about filling out the 1071 data collection form when you have one principal owner filling out the form on behalf of other principal owners. Specifically, here's the question we received. The question is this: can one principal owner answer the demographic information regarding the other principal owners or does each principal owner need to answer their own questions?
In other words, we have one person opening an account on behalf of a business that has multiple owners. Can that one owner do everything we need to do for the 1071 demographic information collection? Or does each principal owner need to answer their own questions?
The answer to this is going to come from the 1071 Final Rule. So when we look at the 1071 final rule and we dive into the prefatory text and the preamble and the commentary that they have built into the final rule, here's what they say. They say, “The bureau believes it is reasonable to assume that if the person filling out the data collection form on behalf of an applicant does not feel comfortable providing the information for any reason, including because they are not the principal owner at issue or do not believe they can provide accurate responses, that they will exercise their right to refuse to provide the requested information.”
Here, the CFPB is acknowledging that in some cases the person opening the account may not have all the information they need and it is appropriate for them to select the box that says they refuse to provide the requested information. In other words, it does look like the CFPB is acknowledging that one principal owner will be completing this form on behalf of other principal owners as it relates to the demographic information.
They go on, they say, “Further, an applicant can also choose not to fill out the entirety of the form, to not provide responses to a specific question, or to select the I do not wish to provide this information or similar response option available for each of the demographic questions on the sample data collection form. As a result, the Bureau does not believe it is necessary to include the suggested options on this sample data collection form to address any discomfort by persons that may be completing the data collection form, who are not principal owners, as suggested by some commenters.”
Some commenters have brought this up, and this is what the CFPB has said. So this essentially tells us that, no, you don't have to have every principal owner answer each specific question. The person opening the account can do it on behalf of them. If they don't feel comfortable, they're likely going to select options that work for them. So that's what the CFPB has told us in the final rule, and therefore you don't have to require every single principal owner to specifically answer every demographic data about them when completing that data collection form from the 1071 demographic information.
That's it for this Compliance Clip.