The Consumer Compliance Rating System (CCRS) is an interagency framework developed by the Federal Financial Institutions Examinations Council (FFIEC) member agencies for evaluating an institution’s ability to manage consumer compliance risk and to prevent harm to consumers. CUNA’s compliance staff looked into the CCRS and what it means for credit unions in a recent CompBlog entry.
The agencies finalized changes to the current 36-year-old rating system last year, in order to bring it more in line with existing consumer compliance approaches and the examination focus toward risk. These revisions to the existing guidance are effective March 31.
The CCRS is a supervisory policy for evaluating a financial institution’s adherence to consumer compliance requirements. It emphasizes the importance of an institution’s compliance management system (CMS). Particularly the institution’s compliance risk management practices that are in place to manage consumer compliance risk, support compliance, and prevent consumer harm.
NCUA integrates the current rating system into its existing CAMEL structure. NCUA has integrated the revisions into the management (M) component in CAMEL where NCUA examiners will assess a credit union’s ability to effectively manage its consumer compliance risk. The revisions to the CCRS were not developed to set new or higher supervisory expectations.
Credit unions with assets over $10 billion will be assessed by both NCUA and the CFPB for an effective CMS and compliance with the federal consumer financial protection laws falling under each regulator’s jurisdiction.
State regulators may also assign consumer compliance ratings to evaluate compliance with both state and federal laws and regulations. If the credit union has over $10 billion in assets, it may receive a consumer compliance rating from its state regulator and the CFPB.
There are four principles of the CCRS that serve as its foundation: