The proposed new model would retain the 1-to-5 rating scale, which would be “based primarily on the adequacy of its CMS,” FFIEC said. Institutions would be assessed in three categories: board and management oversight, compliance program and violations of law and consumer harm.
The FFIEC added
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.
To foster regulatory consistency, the new rating system would apply to all institutions – banks and nonbanks alike. Since the CFPB is a FFIEC member the rating system would apply to the non-depository institutions the CFPB oversees for consumer compliance purposes. Comments are due 60 days after publication in the Federal Register.
Read the proposed rule.