Survey: 60% of lenders struggle to keep pace with regulatory changes

Widespread compliance and operational challenges face the lending industry, with 60% of lenders struggling to keep pace with regulatory changes.

In addition, more than two-thirds of lenders report recurring loan calculation errors, further underscoring risks to both efficiency and customer trust, according to a nationwide survey of over 2,000 lending, banking, auto finance and fintech professionals by lending software provider Carleton released today.

Most organizations face discrepancies weekly or monthly, often caused by miscalculated fees, interest rate errors or human mistakes. Nearly half said compliance issues had already led to rework, audit findings or legal exposure, while confidence in existing systems remains low, with 44% rating them poorly, according to the release. Complex regulations and loan structures add to the strain.

Respondents cited challenges with the Truth in Lending Act (TILA), the Home Ownership and Equity Protection Act (HOEPA), and state usury limits, while more than 30% said tiered rates and variable payments often trigger delays and errors, according to the release. Updating systems to reflect regulatory changes can take months, and one-quarter of organizations require cross-functional teams to manage updates, further impacting efficiency.

Looking ahead, lenders identified the greatest needs as more accurate calculation software, improved audit readiness, better system integration and real-time monitoring for compliance, according to the release. Demand for automation and proactive compliance tools as the industry seeks to reduce costly errors and simplify processes without slowing down deal execution.

Check out our exclusive industry data here.