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Financial Services Law Insights and Observations

FFIEC Finalizes Updated Uniform Interagency Consumer Compliance Rating System

Federal Issues Consumer Finance CFPB FFIEC

Federal Issues

On November 7, the Federal Financial Institutions Examination Council (FFIEC) announced the issuance of an updated Uniform Interagency Consumer Compliance Rating System, more commonly known as the “CC Rating System.” In final guidance the FFIEC explains that the new rating system has been re-designed “to better reflect current consumer compliance supervisory approaches and to more fully align the CC Rating System with the Agencies’ current risk-based, tailored examination processes.” The agency also notes that the revisions “were not developed to set new or higher supervisory expectations for financial institutions and their adoption will represent no additional regulatory burden” (emphasis added).

Under the new CC Rating System, institutions will be assessed on a 1-to-5 rating scale in three distinct categories: (i) board and management oversight; (ii) compliance program and violations of law; and (iii) consumer harm. The new rating system will be used by all FFIEC member agencies – including CFPB in its evaluation of non-depository institutions. FFIEC member agencies plan to implement the updated rating system on consumer compliance examinations that begin on or after March 31, 2017.