The FFIEC agencies (including NCUA and CFPB) today issued a Joint Interagency Proposed Rule, updating the Uniform Consumer Compliance Rating System for the first time since it was established in 1980. The proposed rule will have a Notice and Comment period for the public to provide input.

The agencies recognize that the compliance world has changed and are updating the rule to reflect existing laws and regulations.

In developing the revised system there will be 3 categories under the proposed system:

1.Board and Management Oversight,

2.Compliance Programs; and

3.Violation of laws and Consumer Harm.

Other FFIEC agencies will have a rating of 1-5 for the various categories, but NCUA will consider ratings within the context of the existing CAMEL rating structure and will not have a separate compliance rating.  The CFPB will do individual ratings for institutions subject to their jurisdiction.  NCUA stated there will be no new supervisory expectations with these changes. 

In the Press Release, the FFIEC stated that the revisions are designed to more fully align the rating system with the FFIEC agencies’ current risk-based, tailored examination approaches. The proposed revisions were not developed with the intention of setting new or higher supervisory expectations for financial institutions; their adoption will represent no additional regulatory burden.

CUNA will analyze this rule to determine the impact on credit unions and will participate in the rulemaking process to ensure a minimal impact. A link to the proposal can be found here.