Carleton, a provider of compliant loan calculation and disclosure solutions, today released findings from a nationwide survey highlighting the extent to which lenders face ongoing compliance risks, calculation inaccuracies, and regulatory change management challenges that impact both operations and customer trust.
The survey, presented to more than 2,000 lending, banking, auto finance and fintech professionals, revealed that over two-thirds of organizations experience loan payment discrepancies weekly or monthly, underscoring the potential for costly errors and compliance exposure, according to a press release from Carleton.
The most common causes cited were miscalculated fees and add-on products (23%), incorrect applications of interest rates or APRs (23%) and human data entry mistakes (21%). Confidence in existing systems also remains low, with 44% of respondents rating their confidence only a 1 or 2 on a five-point scale. Nearly half of all respondents reported that compliance issues such as inaccurate APRs, outdated disclosures or fee miscalculations had already triggered rework, audit findings or even legal exposure.
Regulatory change management is another significant pressure point, the survey found. Sixty percent of respondents said their organizations struggle to keep internal systems and calculations aligned with updates to federal and state lending rules. While only about one-third of organizations reported they can adjust to new requirements in less than a month, nearly a quarter said it takes them three months or more to implement changes. Respondents cited interpreting complex regulations such as TILA, HOEPA and state usury limits as their top compliance challenge (21%), followed closely by updating and testing loan calculation logic (19%) and coordinating changes across multiple vendor or internal systems (18%).
Complex loan structures further compound the problem. Thirty-one percent of respondents said tiered rates, variable payment schedules, and other intricate structures have a significant negative impact on their processes and often lead to delays and errors, according to the press release. Another 17% described these loan types as a constant source of problems for their organization. Only 14% said their current tools were able to handle complex loans seamlessly.
For more information from the Carleton survey, click here.
