Big Changes to CAMEL(S)?

NCUA's CAMEL system has been unchanged since 2007, as I touched on in yesterdays post. But big changes are being proposed by NCUA next week when they act on a proposed Rulemaking: CAMELS Rating System.


You can glean what is coming from this public paragraph from the NCUA IG:


Management indicated that adopting the ‘S’ (Market Sensitivity) for the CAMEL rating system involves public notice and comment, NCUA Board approval, and cohering regulation, examination procedures, and system changes,” the report states. As part of the Enterprise Solutions Modernization program, NCUA is updating the examination platform to incorporate the ability to assign and capture the ‘S’ component as an optional part of the CAMEL rating. Management indicated they expect to have this system change in place in 2021. Management also noted that this will provide the agency the flexibility to adopt the ‘S’ rating if the Board so chooses, and to capture the ‘S’ rating for federally insured state-chartered credit unions in the states where the state regulators adopted the ‘S’ rating.


Said another way, the much awaited exam system MERIT is built to include the S. Expect to learn more on when MERIT will be launched at next week's meeting.