Hiya Ronin,
The kyu/dan ranking system was something that Soke Hatsumi set into place. Prior to that, students received certification via densho (scrolls) which certified them as having attained a certain standing. In the old days, the structure that was in place was a military one, with the jonin (head ninja) at the top, chunin (commanders) giving out orders, and the genin (field agents) who did the actual work. Considering that we as civilians live in a peaceful society, such a structure is not needed for us.
The Bujinkan follows a kyu/dan ranking system. The student starts at 9th kyu (white belt), then progresses through 8th kyu down to 1st kyu (green belt; some dojos add more belt colors), at which point he/she is able to test for shodan (1st degree black belt). In the Bujinkan, if one desires to become a certified instructor (5th dan, or godan), one must pass the sakki (killing intention) test. Qualifications for this are 4th dan, and a recommendation from your shihan. The test basically consists of Soke Hatsumi standing behind you, with shinai in hands (in the old days, the test was done with a live blade), and you wait for the moment that you detect his intention, and pretty much at the last moment, roll out of the way of a full-speed downward slash.
The Genbukan, Jinenkan, and other spin-off groups also employ a kyu/dan ranking system. My understanding is that in the Genbukan, after a certain dan grade, one can choose to train for menkyo licensing in a specific ryu (i.e. Togakure-Ryu Ninjutsu, Takagi Yoshin Ryu, Koto Ryu, etc). Some of the early Bujinkan students were able to attain menkyo licensing in individual ryuha, but now Hatsumi Sensei simply offers ranking in Bujinkan Budo Taijutsu (the umbrella system of the Bujinkan's 9 ryuha).
Again, I must reiterate, for the benefit of those who have wondered, Stephen K. Hayes is still in good standing with Soke Hatsumi and the Bujinkan
(click here for an article about Hatsumi and Hayes) Stephen K. Hayes still remains in the Bujinkan, and his students can still receive Bujinkan certification. However, most of his focus now is on building his art of To Shin Do.