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FFIEC Proposes Revisions to Uniform Consumer Compliance Ratings

The FFIEC is seeking Comments on Proposed Revisions to Uniform Interagency Consumer Compliance Rating System.

The Federal Financial Institutions Examination Council is seeking public comment on its proposal to revise the existing Uniform Interagency Consumer Compliance Rating System (CC Rating System) to reflect regulatory, supervisory, technological and market changes since its establishment in 1979. The CC Rating System used composite ratings of 1 to 5 with a rating of 1 indicating the strongest performance and risk management practices and a 5 rating indicated the most critically deficient level of performance.

The FFIEC is proposing revisions to the existing CC Rating System, recognizing that there have been legislative, regulatory, supervisory, technological, and market changes since the adoption of the current CC Rating System. The proposed CC rating system would assign a consumer compliance rating based primarily on the adequacy of its Compliance Management System (CMS) and is based on a set of key principles.  The Agencies agreed that the proposed ratings should be: (1) Risk-based; (2) Transparent; (3) Actionable; and (4) an Incentive for Compliance. Each principle is discussed in detail in the guidance. The Agencies are proposing a CC Rating System that includes three categories of assessment factors: Board and management oversight and commitment to the CMS; the compliance program and; violations of law and consumer harm.

The proposed system would not assign specific numeric ratings to any of the assessment factors. Interestingly, an institution would not have to receive a satisfactory rating in all categories to receive an overall satisfactory rating.  On the other hand, even if some assessments are rated as satisfactory, the institution can still receive an overall rating that is less than satisfactory.

Comments must be received on or before July 5, 2016.