Consumer Affairs: Revised Consumer Compliance Rating System

July 7, 2017

On November 22, 2016, the Board of Governors issued the attached CA Letter 16-8, “Uniform Interagency Consumer Compliance Rating System”, which summarizes the Federal Financial Institutions Examination Council’s (FFIEC) updated Uniform Interagency Consumer Compliance Rating System (CC Rating System). The revised CC Rating System replaces a 40-year old platform and better aligns with the current supervisory approach that focuses on risk-based, customized examinations. This system is effective for exams where scoping begins on or after March 31, 2017.

The revised CC Rating System establishes a framework of 12 compliance factors, organized in three categories: board and management oversight, compliance program, and violations of law and consumer harm. Examiners will use these 12 factors to assess a bank’s compliance management system and risk management practices designed to manage consumer compliance risk, support compliance with consumer protection laws and regulations, and prevent consumer harm. While none of the 12 factors are new to our supervisory approach, they are organized differently.  View the Previous vs Revised CC Rating System

The revised CC Rating System uses the same numeric rating system of 1 to 5, where 1 represents the highest rating and the lowest degree of supervisory concern.  The revised CC Rating System was not developed to set new or higher supervisory expectations and its adoption should not increase regulatory burden for banks nor significantly shift a bank’s consumer compliance rating. The most obvious change is the formal inclusion of consumer harm prevention. While consumer harm prevention is new to the CC Rating System, the Federal Reserve has been considering it as part of our supervisory approach and rating for some time now through Fair Lending, Unfair or Deceptive Acts or Practices, and technical compliance reviews.

If you would like to learn more about the CC Rating System, you can reference the attached CA Letter 16-8, “Uniform Interagency Consumer Compliance Rating System” or read the Consumer Compliance Outlook article, “Implementing the New Uniform Interagency Consumer Compliance Rating System”.  In addition, feel free to contact your designated Consumer Affairs examiner should questions/comments arise.