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Navigating Dodd-Frank 1071: Turning Compliance Challenges into Opportunities

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Watch our on-demand webinar to gain up-to-the-minute expertise on the impact of Dodd-Frank 1071 on small business lending.
Understand the important considerations faced by FIs and their small business customers.
Learn best practices to position your FI for success by fostering operational efficiency, lowering compliance cost and risk, and creating opportunities in untapped markets.

In the evolving landscape of financial regulation, understanding and complying with Dodd-Frank 1071 presents both challenges and opportunities for financial institutions.

Mastering this terrain can seem daunting, but with the right strategies and insights, compliance can become a catalyst for growth and innovation.

Compliance with Dodd-Frank 1071 has been an important and sometimes contentious topic of discussion, due in part to varied sentiment, the US district court injunction, anticipated new effective dates, requisite change management, and rigorous regulatory enforcement. To make matters even more challenging, strategies and interpretations of compliance requirements are inconsistent across institutions, making the job of compliance an ongoing task.

Seizing the Opportunities

As financial institutions figure out how to keep up with these challenges, they have several opportunities and choices. Compliance with Dodd-Frank 1071 presents opportunities for expanded customer data analytics, operational standardization, and tapping into underserved market segments. Leveraging these potential benefits can lead to significant advancements for financial institutions.

“We want to begin collecting the data as soon as we can so we can start validating our processes and our training environment.” - Jason Spelliscy, Senior Manager - Product Compliance, nCino

nCino's Role in Compliance

With over 300 customers originating 1071-reportable loans on our platform, nCino is keen on making compliance manageable and beneficial for financial institutions. Our robust solution includes logic-based mappings, data review screens, comprehensive data capture, viewing restrictions, permissions, and data extracts. Our goal is to create a seamless experience for FIs and their users.

“No matter what is thrown your way, we are here to be your partner. Don’t let this regulation become a burden for you, rather let us (or your technology partner) worry about the data part of this regulation so you can focus on the process and procedure side as well as leverage this new data set to take advantage of any opportunities in your institution.” - Lisa McBride, Senior Product Manager, nCino

Different Approaches to Implementation

The road to implementation varies among organizations. While some have put their trust in a tech partner, others are still in the early stages of crafting a plan. Some institutions plan to build their own solution, while others have postponed their plans, buying time due to delayed milestones. Most FIs who participated in the webinar were staying the course as well as considering a tech partner, regardless of market speculation or timeline.

Dodd-Frank 1071 may present challenges, but with forward-thinking strategies and the right tools, your institution can navigate the compliance landscape successfully and seize the opportunities it presents.

While you formulate a plan for your FI to comply to these new regulations, it’s important to know your potential technology vendor’s strategy to help you navigate these new hardships. Evaluate how your tech partner:

Prepares for these challenges
Adapts to evolving regulatory requirements
Responds to the demands of these new regulations

“We intend to continue to have user groups around the customers that are taking 1071 over the next couple months and into the next year or two to hear what they are going through and how we can use technology to help… I think it’s fair to challenge any technology provider I the space to be doing the same thing.” - Pierre W. Naudé, Principal Product Manager, nCino

As the Consumer Financial Protection Bureau (CFPB) makes updates to its compliance regulations, nCino will continue a monthly release cadence ensuring that feedback from user groups is used to adapt our product quickly and those changes are put in the hands of our customers.

To gain more insights into Dodd-Frank 1071 and learn how nCino drives growth and innovation, turns challenges into opportunities and simplifies compliance, watch the full on-demand webinar today.

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According to the regulation, “good outcomes” are based on three core principles: acting in good faith, supporting financial objectives and avoiding foreseeable harm. In other words, lenders must act in their customers’ best interests by providing tailored products and services, communicating transparently and avoiding any potential harm.

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4 Steps to Prepare Your Financial Institution for Dodd-Frank 1071

Dodd-Frank 1071’s final rule, issued on March 30th, 2023, one day before the critical amendment to the Equal Credit Opportunity Act (ECOA) was anticipated to be finalized, is a game-changer for small business lenders.The rule mandates that financial institutions report certain lending data points for small business lending, including demographic data on women-owned, minority-owned and LGBTQI+-owned small businesses. This data will be used by the Consumer Financial Protection Bureau (CFPB) to enforce fair lending laws and to identify community needs and access to credit. The data collected under the rule will also be used to develop new programs and initiatives to support small businesses.

When a financial institution (FI) is required to collect and report the required data is dependent upon the number of small business loans originated during 2022 and 2023. The earliest date an FI is required to begin collecting data is October, 1, 2024 (2,500 originations) with time extensions to April 1, 2025 (100 or 500 to 2,500 originations) or January 1, 2026 (at least 100 originations), depending on circumstances.

The rule is a complex one, and FIs will need to take steps to comply with it. As your FI prepares to conform to the new requirements, here are some actions to consider.

Navigating Dodd-Frank 1071: Turning Compliance Challenges into Opportunities

Other Topics

Region

In the evolving landscape of financial regulation, understanding and complying with Dodd-Frank 1071 presents both challenges and opportunities for financial institutions.

Seizing the Opportunities

nCino's Role in Compliance

Different Approaches to Implementation

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