Federal Financial Institutions Examination Council (FFIEC)

What Is the Federal Financial Institutions Examination Council (FFIEC)?

The Federal Financial Institutions Examination Council (FFIEC) is an interagency body of the U.S. government comprised of several financial regulatory agencies. The FFIEC was made on March 10, 1979, and is intended to advance predictable and uniform standards for financial institutions; the council likewise supervises the appraisal of real estate in the U.S.

Grasping the Federal Financial Institutions Examination Council (FFIEC)

The FFIEC was laid out in 1979, as per the provisions of the Financial Institutions Regulatory and Interest Rate Control Act of 1978. It initially comprised of five federal agencies with jobs in financial regulation.

The member bodies are:

• The Federal Reserve Board of Governors
• The Federal Deposit Insurance Corporation
• The National Credit Union Administration
• The Office of the Comptroller of the Currency, and
• The Consumer Finance Protection Bureau.

A 6th body, the State Liason Committee, was added as a voting member in 2006.

All as an interagency regulatory body, the FFIEC makes uniform standards and principles for the examination of financial institutions by its composite agencies. It further makes suggestions planned to keep up with uniformity in how financial institutions are regulated at the federal level.

The FFIEC creates normalized reporting systems for federally administered banks and financial institutions, the holding companies associated with them, and the nonfinancial auxiliaries of both the financial institutions and their holding companies. In this capacity, the FFIEC trains examiners who work for the council's member agencies. Those training programs are additionally open to employees of state regulatory agencies.

Inability to conform to FFIEC standards can bring about fines and punishments, as well as reputational damage to a financial institution.

FFIEC Compliance

The FFIEC is responsible for making standards and rules for financial institutions with comply to federal laws and regulations, and for guaranteeing that these laws are upheld reasonably and uniformly.

There are eleven categories of FFEIC regulations, going from data management and security to business development and continuity planning. These rules are expected to safeguard consumers from risks or mismanagement from their financial institutions.

To guarantee compliance, the FFEIC can impose fines and different punishments on federally directed financial institutions.

The FFIEC and Real Estate

In 1980, the council was given the responsibility of facilitating public access to mortgage data from financial institutions as per the Home Mortgage Disclosure Act of 1975. HMDA requests that lenders distinguish the sex, race, and income of those applying for or getting mortgages. This data permits the FFIEC to monitor trends in housing and mortgage borrowing and lending, for example, a reported increase in mortgage borrowing by blacks and Hispanics starting around 1993.

Following the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), the FFIEC laid out the Appraisal Subcommittee (ASC) to manage real estate appraisal in the U.S. The ASC does this by means of the Appraisal Foundation, which is comprised of the Appraiser Qualifications Board (AQB), the Appraisal Practices Board (APB), and the Appraisal Standards Board (ASB).

FFIEC and Cybersecurity

In 2013, perceiving the significance of online operations to modern finance, the FFEIC made the Cybersecurity and Critical Infrastructure Working Group. This body is responsible for making practical compliance standards and principles across every single financial controller.

To guarantee that the banking system stays secure, the Cybersecurity Working Group distributes customary guidance on the proper measures to safeguard consumer data, risks to the interbank informing system, and the perils associated with hacking and cyber extortion.

Features

• The FFIEC likewise prepares examiners for its member agencies, to guarantee uniform implementation of these standards all through the industry.
• The Federal Financial Institutions Examination Council (FFIEC) is an interagency body of the U.S. government.
• The FFIEC has six member agencies that cooperate to set regulatory standards and principles for financial institutions.
• Inability to consent to FFIEC rules can bring about fines and punishments for federally-managed financial institutions.
• The FFIEC distributes rules for IT management, cybersecurity, and protection of consumer financial data.

FAQ

What Is the FFIEC IT Handbook?

The FFEIC IT Handbook is a set of regulatory standards for banks and other financial institutions. These rules are utilized by federal examiners to decide whether financial institutions are enough recognizing and dealing with the risks associated with banking infrastructure, electronic payments systems, IT auditing, and different crossing points among finance and computer systems.

What Is the Difference Between FFIEC 031 and 041?

FFEIC 031 is a mandatory report on the condition and income of banks with foreign and domestic offices. FFIEC 041 is a consolidated report on the condition and income of banks with domestic branches in particular.

Who Is Regulated by the FFIEC?

The FFEIC is responsible for making uniform regulatory standards and reporting systems for all federally directed financial institutions, as well as their holding companies and auxiliaries. In short, any institution that is regulated by one of the FFEIC member agencies is successfully subject to FFEIC rules.

Does the FFIEC Regulate Credit Unions?

One of the member agencies of the FFIEC is the National Credit Union Administration, which oversees the sanctions and regulations for federal credit unions. Accordingly, all credit unions fall under FFIEC regulations.

What Is FFIEC Compliance?

FFIEC compliance means complying with the rules and standards set out by the Federal Financial Institution Examining Council. Inability to conform to these standards can bring about fines and punishments for a financial institution.