Teslar's 1071 Solution: Simple Compliance, Better Customer Experience

Section 1071 is designed to improve accountability and fairness in lending practices by requiring banks to collect and report demographic data on loan applicants. But what does this mean for relationship banking, especially when new business deals rarely begin with a formal application—sometimes just notes on a napkin?

While the regulation’s intent may be altruistic, many relationship bankers are concerned about its potential negative impact on the customer experience, especially for commercial and small business customers. These customers are often the bank’s largest and most profitable, making it critical to preserve the personal touch that is vital for long-term relationships and business strategy.

Although there is a possibility of an overturn, there is no guarantee that the new administration will change or eliminate Section 1071 before compliance deadlines begin this summer. There are a lot of competing priorities on the administration’s agenda that could take precedence within the first six months.

We can still hold out hope for a reversal, but waiting to act could leave you scrambling for a solution or stuck in an implementation queue when it’s time to start collecting data. Preparing now ensures your bank has a consistent process in place from Day 1, avoiding unnecessary disruptions to your operations and customer experience.

This is where Teslar’s 1071 solution comes in. Our approach isn’t about making a data storage or collection platform to check a technology box. Instead, we’ve designed every aspect of our solution to address two critical concerns:

1) Concern of the negative impact on your customers, and

2) Fear of investing in a solution while still uncertain the ruling will remain.

#1: A Customer-Centric Approach to 1071 Compliance

Most business applications start informally—quick notes jotted down on a post-it, the back of an envelope, or even a napkin. Teslar’s 1071 solution respects this reality, streamlining the transition from napkin to formal applications through a user-friendly digital interface. Whether data is entered from online applications, manual entries, or imported files, Teslar centralizes the entire data collection process into a single system.

With logic-driven applications, flexible data entry, and efficient document handling and guarantor management, the solution allows you to maintain your preferred methods of doing business while enhancing the customer experience and ensuring compliance with minimal friction.

Teslar integrates directly with core banking systems, eliminating redundant data entry by pulling in necessary data fields. The system asks only necessary questions, pre-filling available data points from the core. This keeps the application process simple and seamless while ensuring compliance. The application displays to the customer when a question is a 1071 requirement.

While beneficial for the bank to be able to enter data manually, digitally, or via import, Teslar’s flexibility also benefits the borrower with an experience tailored to their needs. Customers can use the digital application at home, a kiosk in the bank, or during an in-person meeting with the banker.

Borrowers and guarantors can upload required documents digitally, reducing the administrative burden for both banks and applicants. To ensure privacy and compliance, the system protects guarantors by keeping their documentation separate from other applicants.

Whether customers submit their applications online or bankers assist with manual entry, Teslar’s 1071 solution simplifies the process for everyone involved. With streamlined workflows and user-friendly tools, you can focus on maintaining exceptional customer service while staying ahead of regulatory requirements.

#2: A Smart Investment for the Future, 1071 or Not

Some banks may question the necessity of a 1071 solution, especially considering the potential for regulatory changes under the incoming administration. However, investing in the right technology can provide long-term value regardless of whether the regulation is overturned.

Teslar’s 1071 solution goes beyond compliance. It supports banks in delivering seamless, customer-centered experiences. Whether 1071 remains in effect or not, an intuitive digital application for business customers is becoming essential. Today’s customers expect easy, accessible digital tools they can use whenever and wherever it’s convenient for them.

Even if regulatory requirements shift, Teslar’s tools improve commercial (and consumer) lending processes, operations, and customer experience.

Optimize Operational Efficiency

Teslar’s automated workflows reduce manual data entry, allowing staff to focus on delivering exceptional customer service.

Enhance Data Accuracy and Readiness

Teslar’s centralized platform simplifies data management and task coordination. With robust reporting and analytics capabilities, banks can maintain data integrity, monitor processes, and easily ensure nothing slips through the cracks.

Why Choose Teslar for 1071 Compliance?

Teslar’s 1071 solution goes beyond compliance. It empowers banks to deliver seamless, customer-centered experiences while adhering to regulatory demands. By simplifying compliance, centralizing data, and minimizing operational disruptions, Teslar enables banks to focus on what they do best: serving their communities.

Additional features of Teslar’s 1071 solution include:

Firewall Rule

To protect customer privacy while ensuring regulatory compliance, Teslar’s platform follows the firewall rule, ensuring that demographic data remains hidden from decision-makers.

Controlled Access

The platform ensures compliance officers access only the raw data needed for reporting, no identifiers like names or phone numbers. Meanwhile, identifying information flows securely to the lending team.

Data Analytics and Reporting to Meet Compliance Standards

Teslar’s data analytics tools provide real-time data review and validation, enabling banks to identify and address potential issues before submission. The platform also supports a clear audit trail that proves every 1071-required question was presented to applicants (since applicants can decline to answer).

Customizable Disclosures

The platform allows banks to tailor disclosure messages, helping inform applicants about the purpose of specific questions without influencing their responses. This will ensure applicants understand when a question is being asked as a 1071 requirement and avoid them feeling pressured or that the bank is overstepping with the additional demographic questions.

Navigating Section 1071 compliance doesn’t have to be daunting. Teslar’s solution equips banks with the tools they need to collect, manage, and submit data accurately and efficiently, ensuring that compliance is as simple as possible. With Teslar, community banks can move confidently into this new regulatory landscape, knowing they have a solution that values their customers’ experience and their time, and will improve efficiencies bank-wide, not just for 1071.