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NCUA agreed to a recommendation from its Office of Inspector General that the agency modify its CAMEL rating system by adding an "S" rating for credit unions' sensitivity to market risk.

The recommendation and agency response came in the OIG's "Review of NCUA's Interest Rate Risk Program" report in November. The OIG specifically recommended adding the S rating to "improve interest rate risk clarity and transparency." The office also recommended revising the "L" rating to reflect only liquidity factors – instead of both liquidity and asset-liability management.

NCUA responded in the same report saying it agrees with both recommendations and plans to submit a proposal on revisions to the CAMEL rating system to the NCUA Board by the end of September 2016, with final implementation estimated by the end of 2018. The agency also noted that streamlining the L rating will remove references to interest-rate risk in its guidance.

"NAFCU has long maintained that NCUA should address interest rate risk on the exam side, rather than through additional regulation," said NAFCU Director of Regulatory Affairs Alicia Nealon. "We are carefully examining how the addition of 'S' to the CAMEL rating system will impact our members."

NCUA removed interest-rate risk from the calculation of the risk-based capital ratio in October's final RBC rule. That month, NCUA Office of Examination and Insurance Director Larry Fazio led a NAFCU webcast on the RBC rule, during which he said the board does not have any plans to do a rule on interest-rate risk. NCUA Chairman Debbie Matz has said the same.

NCUA said the process will involve the reprogramming of multiple data systems and revisions to examination policies and procedures.