WASHINGTON—The Federal Financial Institutions Examination Council, of which NCUA is a member, announced the issuance of an updated Uniform Interagency Consumer Compliance Rating System.
The revisions reflect the regulatory, examination, technological, and market changes that have occurred since the release of the original rating system. The FFIEC member agencies said they plan to implement the updated rating system on consumer compliance examinations to begin on or after March 31, 2017.
The Consumer Compliance Rating System is a supervisory policy for evaluating financial institutions’ adherence to consumer compliance requirements. The Uniform Interagency Consumer Compliance Rating System is designed to more fully align the rating system with the FFIEC agencies’ current risk-based, tailored examination approaches the FFIEC said.
“It was not developed with the intention of setting new or higher supervisory expectations for financial institutions. The rating system’s adoption will represent no additional regulatory burden for financial institutions,” the FFIEC said in a release.
In July, NAFCU commented on the proposal and encouraged the FFIEC to reconsider as it would require the CFPB to provide a separate composite rating for all credit unions with assets of more than $10 billion. NAFCU Senior Regulatory Affairs Counsel Michael Emancipator wrote that a review of credit unions’ compliance management systems by both NCUA and CFPB is redundant and that overlapping reviews “can lead to different ratings from each agency, or worse, conflicting guidance for each credit union.”
“Financial institutions are assigned confidential consumer compliance ratings based on evaluations made during the exam process of their compliance with consumer financial laws. The rating is on a scale of 1 to 5 in order of increasing supervisory concern, with 1 being the lowest level of concern and 5 being the highest level of concern,” explained NAFCU, which said it is reviewing the updated system.
The FFIEC members proposed the latest guidance in May 2016 and invited public comments through July 5, 2016. The agencies received 17 comments through the proposal process. Those comments were taken into account in finalizing the Uniform Interagency Consumer Compliance Rating System, the FFIEC said, noting that the updated rating system will be published shortly in the Federal Register.
FFIEC members are the NCUA, FDIC OCC, Federal Reserve and the CFPB.