Glossary

Federal Financial Institutions Examination Council (FFIEC)

The Federal Financial Institutions Examination Council is a formal coalition of federal agencies that regulate the financial sector. It aims to streamline the supervision of financial institutions. To this end, five federal agencies work together to create uniformity across several regulatory fields and levels. The Council recommends standards, principles, and report forms for conducting federal examinations of the organizations governed by members.

The History of Federal Financial Institutions Examination Council 

The Federal Financial Institutions Examination Council came to life in 1979. Since then, the FFIEC has experienced some changes. In 1989, a new law established the Appraisal Subcommittee. Then, in 2006, the Financial Services Regulatory Relief Act expanded the Council by adding a new voting member: a representative state regulator.

The Purpose of the Federal Financial Institutions Examination Council

Financial institutions must comply with a complex web of regulations in various jurisdictions. The FFIEC aims to reduce the complexity by getting federal, state, and local agencies on the same page. Here are some additional aspects of the FFIEC’s purpose:

  • Improve efficiency and effectiveness in the examination of financial institutions.
  • Promote uniformity of assessments.
  • Encourage coordination among the federal agencies that examine financial institutions.
  • Facilitate information sharing between the agencies.
  • Make recommendations for improvements in examination policies, procedures, and practices.

The Council also performs other functions, such as issuing consumer protection laws and regulations, guidance and overseeing the development of new technologies to be used in examinations. Additionally, its council members hold meetings to discuss and work toward specific objectives.

Council Members and Meetings 

This interagency coalition includes five member organizations. Each one has a seat on the Council, and its chairman or another high-ranking official represents them. The group meets at least four times per year. These are the five council members.

  1. The National Credit Union Administration: The NCUA acts as an independent agency of the federal government. It oversees credit unions and receives funding from them instead of tax dollars.
  2. The Board of Governors of the Federal Reserve System: The Federal Reserve Board is the central bank of the United States. Congress created it in 1913 to provide a more stable financial system that protected the economy and inspired consumer confidence.
  3. The Office of the Comptroller of the Currency: The OCC is a bureau of the U.S. Department of the Treasury. It primarily focuses on regulating, supervising, and chartering national financial organizations.
  4. The Federal Deposit Insurance Corporation: The FDIC is an independent agency of the federal government. Its primary function is to protect depositors in banks and savings associations from losses in the event of a bank failure.
  5. The Appraisal Subcommittee: The ASC is a subcommittee of the FFIEC. It oversees the appraisal process for federally regulated financial institutions.

In addition to these, the Council has several non-voting members and liaisons. These include representatives from the Conference of State Bank Supervisors, the American Institute of Certified Public Accountants, and the Consumer Financial Protection Bureau.

The Importance of Federal Financial Institutions Examination Council Enforcement

The Federal Financial Institutions Examination Council has significantly impacted the financial regulatory landscape. It is an essential forum for cooperation and coordination among the various federal agencies that examine financial institutions. Additionally, the Council provides a mechanism for these agencies to share information and best practices.

The FFIEC also plays a vital role in enforcement. When one of the member agencies discovers a violation by a financial institution, the Council can take action. This may include ordering the institution to take corrective measures or imposing monetary penalties.

Recently, the FFIEC has issued guidance on various topics affecting modern-day businesses. These have included cyber security, retail foreign exchange transactions, and appraisal practices. The Council also issued guidance on the use of social media by financial institutions.

How Message Archiving Helps Financial Institutions With Compliance

Financial institutions must comply with various laws requiring the tracking and storing of specific data types. These include communications data related to transactions and other business operations. Over the years, several companies have faced compliance issues for failing to track and retain this data correctly.

LeapXpert’s automated message capturing and archiving tools streamline the process. They also make it easy for authorized persons to locate necessary files and present them to regulatory bodies during investigations. Book your demo to see how it works.