NCUA Consumer Compliance

1. Lisa Roberson, Program Officer Office of Consumer Financial Protection and Access NCUA Consumer Compliance GA CU Compliance Council Meeting Atlanta, Georgia March 14, 2017 The information contained in this presentation is for informational purposes only. It expresses the views and opinions of NCUA staff and is not binding on NCUA or NCUA Board Members. The presentation and participation by the presenter does not constitute an endorsement by the presenter or NCUA of the Georgia Credit Union Affiliates or its products or services. The comments are of the presenter’s and not an official legal opinion of NCUA.

2. NCUA Consumer Compliance Office of Consumer Financial Protection & Access (OCFPA) • Office of Examination & Insurance (E&I) NCUA Regional Offices (ROs) • Consumer compliance reviews during examinations • Consumer compliance subject matter examiners • Overall examination policy and guidance • Examination tools and resources • Bank Secrecy Act (BSA) / Anti Money Laundering (AML) • Flood Disaster Protection Act (FDPA) • SAFE Act • Office of primary interest for consumer financial protection policy, rulemaking, guidance & training • Fair lending examinations • Interagency consumer compliance coordination • NCUA Consumer Assistance Center Consumer Compliance March 2017

3. Consumer Compliance Rating System FFIEC Uniform Interagency Consumer Compliance Rating System (CC Rating System) • Published - November 7, 2016 • Effective Date - March 31, 2017 • CC Rating System Final Guidance • NCUA is planning to release guidance on the updated rating system. Consumer Compliance March 2017

4. Consumer Compliance Rating System NCUA and Current CC Rating System • NCUA does not issue a separate CC Rating • NCUA integrates the principals and standards into the current CAMEL structure • NCUA assesses a CU’s ability to manage Compliance Risk and reflects that in the “M” component overall CAMEL rating • NCUA’s practice is not changing Consumer Compliance March 2017

5. Consumer Compliance Rating System FFIEC’s CC Rating System is designed to be • Risk-Focused • Transparent • Actionable • Incent Compliance Consumer Compliance March 2017

6. Consumer Compliance Rating System Emphasizes Compliance Management Systems (CMS) • Board and Management Oversight* • Compliance Program* • Violations of Laws and Consumer Harm *Consideration given to size, complexity, and risk profile, but all credit unions should maintain effective CMS. Consumer Compliance March 2017

7. Consumer Compliance Rating System Compliance Risk Indicators • Board and Management Oversight • Commitment to CMS • Change Management Processes • Risk Management of Products, Services, and Activities • Self-identification Efforts and Corrective Action Consumer Compliance March 2017

8. Consumer Compliance Rating System Compliance Risk Indicators • Compliance Program • Effectiveness of CMS • Policies and Procedures • Training • Monitoring and Audit Programs • Complaint Resolution Consumer Compliance March 2017

9. Consumer Compliance Rating System Compliance Risk Indicators • Violations of Laws and Consumer Harm • Root Cause of the Violation • Severity of Consumer Harm • Duration of the Violation • Pervasiveness of the Violation Consumer Compliance March 2017

10. 2017 Supervisory Priorities NCUA guidance intended to assist credit unions in preparing for the next examination Letter to Federally Insured Credit Unions 17-CU-01 Top areas of supervisory focus include: • Cybersecurity Assessment • Bank Secrecy Act Compliance • Internal Controls and Fraud Prevention • Interest Rate and Liquidity Risk • Commercial Lending • Consumer Compliance NCUA Consumer Compliance Reviews

11. 2017 Supervisory Priorities CONSUMER COMPLIANCE • Military Lending Act • Regulatory Alert 15-RA-04, Announcing Amendments to MLA Regulation (October 2015) • Regulatory Alert 16-RA-04, Complying with Changes to MLA (March 2016) • Regulatory Alert 16-RA-06, MLA – DoD’s Interpretive Guidance (September 2016) • Servicemembers Civil Relief Act Consumer Compliance April 2017

12. Consumer Compliance Resources https://www.ncua.gov/regulation-supervision/Pages/policy-compliance/resource-centers/consumer.aspx Consumer Compliance April 2017

13. Consumer Assistance Center • Responsible for addressing consumer complaints involving federal credit unions (FCUs) with total assets up to $10 billion, and in certain instances, federally insured state-chartered credit unions (FISCUs). • The Consumer Assistance Center receives complaints online and by fax and regular mail. • NCUA’s consumer protection website, MyCreditUnion.gov, hosts the online Consumer Assistance Center and provides access to complaint forms and information about the Consumer Assistance Center’s complaint handling process. Consumer Compliance April 2017

14. Consumer Assistance Center - Online Portal The portal was created to assist credit unions with: • Receiving correspondence from the NCUA Consumer Assistance Center about complaints concerning their credit union • Sending responses and complaint information • Checking the status of complaints filed with the NCUA Consumer Assistance Center concerning their institutions Consumer Compliance April 2017

15. Financial Literacy Questions for you: • Are any of your credit unions doing Payday Alternative Loans (PALs)? • Do you offer Youth Savings Programs? • FFIEC Guidance to Encourage Financial Institutions' Youth Savings Programs and FAQs • NCUA Report: Financial Literacy and Financial Well-Being NCUA Consumer Compliance Reviews

16. Financial Literacy Questions for you: • What NCUA Financial Literacy resources have been most helpful to you? • What else would you like to see? NCUA Consumer Compliance Reviews

17. Reporting Financial Ed Programs CU Profile Form - Credit Unions are Encouraged to Report all Financial Education Programs Have you tried In-School Branches? NCUA Consumer Compliance Reviews

18. OCFPA Contact Information Questions or Comments Lisa Roberson lroberson@ncua.gov (703) 548-2466 Consumer Compliance April 2017