Regulatory compliance professionals at community banks expect to spend a significant amount of their time meeting Truth-in-Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) requirements during the next 12 months, according to a recent survey by Minneapolis-based ""Wolters Kluwer Financial Services"":http://www.wolterskluwerfs.com.
The 242 community banks responding to the firm’s survey were asked what regulatory compliance issues will top their list of concerns over the next year. Sixty percent of respondents said compliance with TILA was No. 1. RESPA followed closely at 58 percent and meeting Bank Secrecy Act (BSA) requirements was third at 37 percent.
Wolters Kluwer said concerns tied to meeting TILA and RESPA requirements are likely to grow at community banks given a resurgence of mortgage lending at these institutions. Lower interest rates, less competition, and an enhanced Federal Housing Administration (FHA) insurance program have led to a spike in mortgage lending activity at community banks in the past year.
In fact, the Wolters Kluwer Financial Services survey found that 43 percent of respondents said mortgage lending was one of the three areas of their business they planned to grow the most in the next 12 months. The others were commercial lending at 49 percent and consumer lending at 37 percent.
Ken Newton, EVP of banking for Wolters Kluwer Financial Services, said, ""The survey results confirm that recent changes to TILA and RESPA will indeed place a significant compliance and operational risk management burden on community banks in the months to come. As these banks increase their presence in the mortgage space, they’ll face a number of challenges in efficiently complying with these regulations.""
""Wolters Kluwer Financial Services"":http://www.wolterskluwerfs.com provides financial organizations with compliance, content, and technology services to manage risk and improve efficiencies across their enterprise.