Something significant has shifted in the lending compliance landscape and the data is finally backing up what many practitioners have felt for years.
A recent nationwide survey of hundreds of financial services and automotive lending professionals, conducted in March 2026, paints a picture that should give any compliance officer pause: frequent calculation errors, inadequate validation practices, and a regulatory environment that is more fragmented and demanding than it has ever been.
The findings are not a warning about a future risk. They are a documentation of a present reality.
The Dual Front: State Activity in a Federal Landscape
For decades, a blend of federal and state oversight controlled compliance. Today, that landscape is expanding. While federal agencies have maintained a quieter posture recently, state regulators have remained remarkably active—and in many cases, even more so. According to recent Carleton survey data, 73% of respondents reported that state regulators have been more active than their federal counterparts over the last 24 months. This suggests that the industry is now facing a dual-front regulatory environment where state-level oversight is just as influential as federal mandates.
The practical consequence of this heightened state activity is compounding complexity. While a federal rule change offers a single point of adaptation, active state legislatures require organizations to manage 20, 30, or 40 different jurisdictions simultaneously. This involves navigating varying timelines, interpretive guidance, and enforcement priorities. With 89% of survey respondents reporting that regulatory changes requiring system or calculation updates occur “frequently” or “almost always,” the pace of change remains unrelenting and the terrain increasingly fragmented.
APR Errors Are Not Edge Cases
The most jarring finding in the data involves APR accuracy under the Truth in Lending Act. 72% of organizations surveyed identified at least one loan requiring an APR reimbursement under TILA in the past 12 months alone.
Nearly three-quarters of lenders committed TILA-actionable errors in actual loan files last year, resulting in inaccurate disclosures, mandatory reimbursements, and heightened regulatory exposure.
As entities work to address continually evolving state‑law requirements, configuration changes and interpretive complexity can introduce systemic issues into core calculations that ultimately affect TILA‑dependent outputs. In these complex environments, a single systemic error can rapidly propagate across thousands of files.
Validation Practices Haven’t Kept Pace
Given the error rates described above, one might expect that organizations have invested heavily in systematic validation as part of their overarching Compliance Management Systems. Surprisingly, the survey suggests otherwise. Only 10% of organizations validate their loan calculations in a systematic, automated manner. The majority, 56%, rely on manual or only partial checks.
Manual validation can catch individual errors, but it cannot reliably detect systemic ones. The distinction matters greatly from a regulatory standpoint. Examiners understand that isolated errors happen. What draws focused scrutiny is a pattern of practice; recurring errors across loan types, products, or calculation parameters that suggest a structural breakdown rather than a one-off oversight. Organizations relying on manual spot-checks are, in many cases, flying blind to exactly the kind of systemic issues that regulators are trained to identify.
One example in working with a client was a bulk set of data evaluation for a particular state with nuances in how the state counts days. The vast majority of the transactions were perfectly compliant. However, narrow edge cases resulted in a slight overcharge by state standards. Manual spot checks increase the potential risk of missing these edge cases. Whereas thorough representative reviews, often by third party analysts, can decrease the risk.
This gap between actual error rates and validation rigor maps almost perfectly onto the confidence data. 67% of professionals surveyed said they are not confident or only slightly confident in their organization’s ability to survive a multi-state examination today. That is not a number that should surprise anyone; it is the logical result of high error rates and insufficient detection mechanisms operating in a heightened regulatory environment.
What Lenders Are Asking for and What it Signals
The survey also asked respondents what improvements they most want to see in their compliance operations. The answers were consistent and revealing: more accurate and reliable calculation software, improved audit readiness and reporting, better real-time monitoring for compliance violations, and stronger system integration across lending platforms.
These are not requests for incremental improvements. They are requests for structural change. Organizations are not asking for slightly better spreadsheets or more frequent manual reviews. They are asking for automation, integration, and the kind of real-time visibility that makes catching errors a systemic capability rather than a lucky catch.
This is a sector signaling that it understands its problem clearly. The challenge is no longer one of awareness, but one of execution. The organizations that close the gap between compliance aspiration and operational reality will be better positioned not just for regulatory examinations, but for the competitive and reputational advantages that come with genuine compliance confidence.
A Structural Problem Requires a Structural Response
The data converges on a clear conclusion: the lending industry is facing a structural compliance problem, and it cannot be resolved through incremental effort alone.
The regulatory environment is more fragmented and demanding than at any prior point in recent memory. Error rates in one of the most fundamental areas of lending law, APR calculation and TILA disclosure, are remarkably high. Validation practices are lagging far behind the scale of risk. Confidence among compliance professionals reflects all of this accurately: most do not believe their organizations could withstand the scrutiny of a rigorous multi-state examination.
Addressing this requires organizations to think differently about calculation accuracy and compliance validation, not as back-office functions, but as core operational infrastructure. It requires investment in automation that can keep pace with the frequency of regulatory change. It requires integration that eliminates the seams where errors accumulate and it requires the kind of systematic, ongoing validation that can identify pattern-of-practice risks before an examiner does.
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Sarah Milovich is General Counsel and Vice President of Compliance with Carleton, the nation’s foremost provider of financial calculation software, loan origination compliance support, and document generation solutions. Learn more at