Alexandria, VA (May 19, 2026) ― Today, the Federal Financial Institutions Examination Council (FFIEC) proposed important revisions to the CAMELS rating system, the framework used by the National Credit Union Administration (NCUA) and other federal regulators to assess the safety and soundness of financial institutions.
As a member of the FFIEC, I approved the proposal and encourage credit unions to provide feedback on the proposal. I’d like to thank FFIEC Chair Michelle Bowman for her leadership, and my fellow FFIEC members for the thoughtful consideration of such an important topic.
Importantly, the FFIEC proposal would maintain the foundational CAMELS structure while updating component and composite rating definitions and evaluation factors to reflect today’s financial landscape. Two major objectives of the proposal are to improve transparency by clarifying how ratings are assessed and to provide institutions with a more predictable and risk-focused evaluation process. The revisions emphasize the factors that materially affect an institution’s financial condition and risk profile over concerns with documentation, policies, or procedural matters when those issues do not pose a meaningful risk to safety and soundness.
This revised framework aligns with many of NCUA’s other efforts to integrate risk-based supervision principles into the examination program, including the elimination of reputation risk and NCUA’s Deregulation Project.
By reducing ambiguity in the CAMELS rating framework, improving transparency, and clearly focusing examinations on material financial risks, these proposed revisions will allow credit unions to dedicate more of their energy to what matters most, serving their members and supporting the communities they operate in.