In the evolving regulatory landscape, compliance is more than a mandate—it's an opportunity to drive transformation. The Dodd-Frank Section 1071 regulation, effective between 2024 and 2026, introduces a new layer of complexity for financial institutions, requiring detailed reporting on lending practices to promote transparency and equity for women-owned, minority-owned, and small businesses.

For many institutions, meeting these requirements feels daunting. How do you implement a scalable, cost-effective solution that ensures compliance while supporting future growth? At Kenway Consulting, we specialize in turning challenges into opportunities. This blog outlines actionable steps for achieving Section 1071 compliance, backed by insights from a recent project with an international bank.

Understanding the Dodd-Frank Section 1071 Regulation

The Dodd-Frank Section 1071 regulation mandates the covered financial institutions collect and report detailed information on small business loan applications, adding an additional level of detail and compliance requirements for banks, credit unions, and nonbank lenders. Aimed at fostering transparency and equity, this regulation emphasizes non-discriminatory lending practices, particularly for women-owned and minority-owned businesses. Effective between 2024 and 2026, Section 1071 requires financial institutions to gather up new key data points on small business credit applications, from loan terms and ownership demographics to pricing information, and report this data to the Consumer Financial Protection Bureau (CFPB) for regular oversight.

Key Provisions of 1071 Regulation:

• Data Collection: Financial institutions must collect and store data on small business loans, including demographics, loan details, and the outcome of each application. Key data points include:
  • Loan application information
  • Pricing details
  • Business data
  • Application outcomes
  • Business ownership
  • Demographic information
• Data Reporting: Collected data must be reported to the CFPB to facilitate oversight and help identify discriminatory practices.
• Enhanced Enforcement: The data collected enables the CFPB to analyze lending patterns and ensure compliance with fair lending standards.

The Challenges Institutions Face

For many institutions, the journey to compliance includes overcoming significant challenges:

1. Regulatory Pressure: Deadlines for compliance loom large.
2. Data Complexity: Managing sensitive data securely across decentralized systems.
3. Scalability Needs: Balancing immediate needs with future growth.
4. Cost Constraints: Finding a solution that doesn’t break the bank.

How Kenway Consulting Tackled the Problem

When a leading international bank approached Kenway, they faced all these challenges. The stakes were high—they needed a solution fast, one that was scalable, cost-effective, and aligned with their unique operational needs. 

Assessing the Options

Kenway evaluated two Salesforce-based approaches to support Section 1071 compliance: Salesforce Survey and Salesforce Experience Cloud leveraging OmniStudio in Financial Services Cloud (FSC).

Salesforce Survey emerged as a strong choice for institutions prioritizing simplicity and cost-effectiveness:

• Pros: Affordable, user-friendly, and quick to implement. Ability to track if the survey was opened and set expiration dates
• Cons: Limited scalability outside of creating surveys, limited customization options for branding

For institutions seeking advanced functionality, Salesforce Experience Cloud leveraging OmniStudio in FSC offered robust scalability and validation options:

• Pros: Comprehensive features for complex compliance needs. Multiple solution options that to best fit business needs and process in place. High degree of customization of UI/UX
• Cons: Higher costs and more complex configuration.

Tailoring the Solution

Kenway recommended Salesforce Survey, combined with Salesforce Marketing Cloud for survey distribution and tracking. This approach prioritized:

• Cost-Effectiveness: A practical choice for balancing budgets.
• Regulatory Alignment: Captured applicant data with secure storage and streamlined reporting.
• Ease of Use: Simplified implementation for rapid adoption.
• Future Scalability: Ready for expansion to more advanced platforms if needed. 

Steps to Implement a Scalable Compliance Solution

For financial institutions embarking on their compliance journey, the following roadmap can help ensure success:

1. Assess Your Needs
   • Identify the scope of your compliance requirements.
   • Evaluate your current systems for gaps in data collection, reporting, and security.
2. Choose the Right Technology
   • Select a platform aligned with your budget, functionality, and scalability needs.
   • Salesforce offers flexible options, from basic surveys to advanced systems like Experience Cloud.
3. Streamline Data Collection
   • Implement tools that automate data entry, reduce errors, and ensure consistency.
   • Incorporate built-in tracking to monitor compliance progress.
4. Strengthen Security Protocols
   • Define robust access controls and data retention policies.
   • Use encryption to protect sensitive demographic and loan data.
5. Plan for Scalability
   • Design a solution that adapts to evolving regulatory demands and business growth.
   • Include pathways for future upgrades to more advanced systems.
6. Partner with Experts
   • Engage consultants with experience in financial services and compliance to guide your implementation.

How Kenway Can Help

At Kenway Consulting, we bring deep expertise in compliance, data management, and Salesforce solutions to every project. Beyond system implementation, our comprehensive services include:

• Process Optimization: Align business processes with data collection and reporting requirements.
• Technical Analysis: Strengthen security and data validation protocols.
• Training and Change Management: Equip teams with the knowledge to manage new systems and processes.
• Automation and Integration: Leverage technology to reduce errors and enhance efficiency.

Achieve Compliance with Confidence

Section 1071 compliance doesn’t have to be overwhelming. With the right approach and a trusted partner, you can transform regulatory requirements into opportunities for growth and innovation.

At Kenway Consulting, we’re committed to helping financial institutions achieve their compliance goals while positioning themselves for future success. Let’s work together to create a solution tailored to your unique needs.

Contact us today to learn how Kenway can help you navigate Section 1071 compliance with ease and confidence.