MINNEAPOLIS--(BUSINESS WIRE)--The majority of U.S. financial institutions expect their consumer lending businesses to grow or remain steady in 2011. However, they acknowledge a soft economy and increasing regulatory burdens could stand in the way of that growth. That’s according to a survey of more than 1,000 banking professionals Wolters Kluwer Financial Services conducted in January.
Seventy-nine percent of respondents to the company’s survey anticipated their institution’s consumer loan volume would rise or remain the same this year. Only 5 percent predicted a decline and 16 percent weren’t sure. Institutions with more than $250 million in assets were most likely to anticipate an increase in loan volume.
Financial institutions responding to the Wolters Kluwer Financial Services survey cited a soft economy (30 percent), stricter compliance regulations (24 percent), reduced loan demand (18 percent), and increased competition (17 percent) as the most common barriers to increasing consumer loan volume.
Upcoming regulatory changes tied to the Dodd-Frank Act and mortgage lending requirements topped the list of respondents’ compliance concerns. One quarter said Dodd-Frank will likely have the most significant regulatory impact on their operations. Another one quarter said Truth-in-Lending Act (TILA) and Regulation Z changes probably will. And nearly one-fifth said revisions to mortgage disclosures and new originator requirements could.
“It’s encouraging to see financial institutions optimistic about their consumer lending businesses in 2011,” said Craig Focardi, senior research director for Consumer Lending at TowerGroup, a Corporate Executive Board company. “Job growth will play a large role in the ability of consumer lending markets to recover this year. But so will the amount of regulatory change occurring and the strategies lenders put in place to address it. Financial institutions that are proactive in their efforts will have a definite advantage over those who don’t.”
“To proactively address rapidly-growing and increasingly-complex regulatory challenges at a time when internal resources are already constrained, it will be essential for financial institutions to find help in the form of a trusted compliance provider with deep and broad expertise,” added Lisa Fraga, vice president and general manager, Banking, for Wolters Kluwer Financial Services.
About Wolters Kluwer Financial Services
Wolters Kluwer Financial Services is a comprehensive regulatory compliance and risk management business that helps financial organizations manage operational, compliance and financial risk and reporting, and improve efficiency and effectiveness across their enterprise. The organization’s prominent brands include: FRSGlobal, ARC Logics for Financial Services, PCi, Compliance Resource Network, Bankers Systems, VMP® Mortgage Solutions, AppOne®, GainsKeeper®, Capital Changes, NILS, AuthenticWeb™ and Uniform Forms™. Wolters Kluwer Financial Services supports its global customers with more than 30 offices in 20 countries and is a leading worldwide provider of compliance and risk management solutions for the financial services industry, serving more than 15,000 banking, insurance and securities customers across the globe. Wolters Kluwer Financial Services is part of Wolters Kluwer, a leading global information services and publishing company with annual revenues of (2009) €3.4 billion ($4.8 billion) and approximately 19,300 employees worldwide. Please visit our website for more information.