Wolters Kluwer shares how U.S. lenders can address challenges in a down market

When U.S. interest rates topped 7% for the first time in 22 years this August, there was a rash of articles by leading industry economists predicting what interest rates would do for the rest of the year and into 2024. The conclusion? There was no consensus among economists. But, according to Wolters Kluwer Compliance Solutions experts, that doesn’t have to mean that lenders must wait around for experts to agree, as there are still long-term economic trends—and regulatory realities—with which lenders must contend.

“At a time when all lenders are struggling to reduce costs, some institutions may be tempted to reduce staffing in areas like compliance that don’t generate revenue or profit," says Simon Moir, Vice President, Banking Compliance Solutions, Wolters Kluwer Compliance Solutions in a recent article for HousingWire, “The Market Outlook May Be Unclear, but Lender Challenges Cannot Get Clearer.”

“Given the current zero-tolerance environment, however, this is dangerous, short-term thinking. Fair lending examination, supervision and enforcement, for example, are top priorities for the CFPB, the prudential regulators, DOJ and HUD,” he says.

Moir goes on to explain why maintaining the long view is essential for lender success in a dynamic economic and regulatory environment.

“Regardless of market conditions, there is a need to ensure that compliance and risk management teams are fully staffed and supported at the highest levels of the organization. One way to leverage these resources is to support them with data and analytics solutions that automate various compliance tasks, such as HMDA and CRA reporting,” Moir says. “These solutions can provide early warning signs for major lending issues, such as redlining, appraisal bias or identifying practices that could be deemed unfair or abusive. The goal should always be to identify these issues before regulators do.”

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