Federal Financial Institutions Examinations Council

As stated on their website, the Federal Financial Institutions Examinations Council (FFIEC) is a “formal interagency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions by” the major regulatory agencies responsible for supervision of the financial industry in the United States. The five member agencies of the Council are the Board of Governors of the FEDERAL RESERVE SYSTEM (FRS), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the COMPTROLLER OF THE CURRENCY (OCC), and the Office of Thrift Supervision (OTS). While the FFIEC has existed since 1979, it has rarely attracted public attention or industry concern. In July 2002, however, the council released draft guidelines on account management and loss-allowance guidance for credit-card lending. The council “found disparities in the quality of account management practices and inconsistencies in the application of existing guidance. The practices can increase institutions’ credit RISK profile to imprudent levels. Further, the inconsistent application of accounting and regulatory guidance can affect the transparency and comparability of financial reporting for all institutions engaged in credit card lending.” As the Wall Street Journal reported, the FFIEC “issued new guidelines in an attempt to clean up inconsistent accounting methods, slow down the providing of credit to consumers who can’t pay it back and to insure credit-card companies are adequately reserved for bad loans and fees tied to the loans.” The council’s actions followed the numerous financial accounting scandals that arose during 2002. The FFIEC also has the responsibility to facilitate public access to depository institution data required under the Home Mortgage Disclosure Act of 1975. As required in the statute creating the group, the council has established an advisory State Liaison Committee composed of five representatives of state financial supervisory agencies.
See also CREDIT CARDS; CREDIT UNION.