A More Practical Way to Think About Compliance Training

Most compliance training isn’t failing because employees don’t care. It fails because it doesn’t reflect how work actually gets done.

That’s worth repeating.

Training fails when it doesn’t match the reality people face every day.

In mortgage lending, teams face real-time decisions — marketing deadlines, borrower conversations, disclosure timing, vendor pressure. A generic, once-a-year training module doesn’t prepare people for those moments.

That’s where targeted compliance training makes the difference.

Early in my career, I was given one hour of in-class training to cover everything compliance for every group of new hires. EVERYTHING. Instead of trying to cram it all in, I took a different approach. I focused only on the things those employees could actually influence — for better or worse — in their roles.

For example:

FCRA

Reporting requirements? Out.

Permissible purpose? In.

Fair Lending

Disparate impact analysis? Out — that’s largely a management responsibility.

Disparate treatment? In.

TILA

APR calculations? Out.

The need for timely and accurate initial disclosures and re-disclosures? In.

Why One-Size-Fits-All Training Alone Falls Short

“Regulation Z originally was passed in 1968….”

Generic compliance training assumes everyone has the same risks and responsibilities. Sure, foundational training has its place. But, in reality, a loan officer, marketing team, compliance manager, and executive leadership are dealing with very different exposures — often on the same loan.

No one really needs to know the history of Regulation Z.

Effective targeted training reflects:

• Actual workflows

• Role-specific decisions

• Past findings and near-misses

• Regulatory expectations, not just rule summaries

When training mirrors reality, people recognize the risk faster — and respond with more confidence.

What “Targeted” Really Means in Compliance Training

“Fair lending for loan officers is more about disparate treatment than disparate impact. So let’s teach it that way.”

Customized compliance training isn’t about fancy platforms or buzzwords. It’s about relevance.

Strong programs focus on:

• Your products, channels, and states

• Your marketing practices and vendors

• Your exam history and regulator feedback

• The decisions your teams struggle with most

Instead of teaching rules in isolation, training walks through how those rules apply when time is short and stakes are high.

How Effective Compliance Training Is Built

“Maybe we should teach how they learn rather than how we teach.”

The most effective training programs follow a clear progression:

Start with real risk

Training should be informed by exams, audits, complaints, and internal reviews — not generic industry assumptions.

Train by role, not title

Loan officers, marketers, compliance teams, and leadership each need different context and depth.

Use real scenarios

Training sticks when it sounds like a real day at work, not a legal memo.

Focus on decisions

The goal isn’t memorization. It’s training employees on how to identify issues. It’s knowing what to do — and when to escalate — in the moment. It’s knowing where to get the answer when you don’t have the answer.

“That tax return doesn’t seem to add up.”

Reinforce consistently

Short, targeted sessions beat annual information dumps every time.

Why This Matters to Regulators

“How do your loan officers not know this stuff?”

That question comes up more often than most lenders expect. Regulators don’t just ask if training occurred. They look at:

• Whether it reflects current risk

• Whether it’s updated after findings or exam feedback

• Whether staff responses are consistent across teams

• Whether management oversight is visible and documented

Targeted compliance training shows intent, awareness, and control — all things regulators care deeply about.

It also respects employees’ time. When training focuses on decisions they actually make, it’s easier to engage with, easier to retain, and far more useful than broad, unfocused sessions.

A More Practical Way to Think About Training

Effective compliance training doesn’t try to cover every rule. It focuses on the moments where people hesitate because they’re unsure how a requirement applies in real situations.

That hesitation is usually where problems start.

At Loan Risk Advisors, we spend most of our time helping lenders sort through those gray areas — often by turning real findings, near-misses, and exam feedback into focused training that actually sticks.

If your current training feels disconnected from day-to-day decisions, it may be worth taking a closer look at where that gap comes from. A short conversation with us can often clarify what needs attention and what doesn’t.

Contact Loan Risk Advisors today to schedule a free discovery call.