The NCUA’s latest Letter to Credit Unions (17-CU-02) provides guidance on updated compliance risk indicators, which incorporate the principles of the Federal Financial Institutions Examination Council Consumer Compliance Rating System (CCRS). The CCRS is an interagency framework for evaluating an institution’s ability to manage consumer compliance risk and to prevent consumer harm.
The updated compliance risk indicators detailed in NCUA's recent letter focus on 3 areas and specific factors within each area.
The first area of focus covers the ability and commitment of a credit union’s board and management to compliance. Risk factors include:
The second area focuses on the credit union’s compliance program, including policies and procedures, staff training, internal controls, and the credit union’s processes for responding to consumer complaints. Risk factors include:
Any expectations listed in the letter for Board and Management Oversight, and Compliance Program also extend to third party relationships.
The last area of focus evaluates deficiencies in the credit union’s compliance risk management system and if there was any consumer harm. Risk factors for this area include:
CUNA’s Compliance staff examines the letter in a recent CompBlog post, which goes more in-depth on the three areas of focus.