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CUs: Share feedback on NCUA's CAMEL rating system via new Reg Alert
NAFCU Thursday sent a new Regulatory Alert detailing the NCUA's recent proposed rule to make changes to its CAMEL rating system. The association's Regulatory Alerts are member-only resources detailing how proposed rulemakings could affect credit unions.
The board approved the proposed rule to add the “S” component – which stands for sensitivity to market risk – to the CAMEL rating system during its January meeting. In addition, the proposal includes redefining the “L” component – which stands for liquidity risk – to distinguish it from the new “S” component. The changes are intended to enhance transparency, allow the agency and state regulators to better distinguish between the two components, and align with bank regulators.
Through the alert, NAFCU highlights the proposed rule:
- intends to enhance transparency and to allow the NCUA to better monitor liquidity risk and sensitivity to market risk for both individual credit unions and across the industry as a whole;
- establishes a CAMELS rating system in line with that used by the other financial regulators; and
- as mentioned, implements regulatory amendments that are largely technical changes to replace the word "CAMEL" with "CAMELS.
Access the Regulatory Alert here. Comments on the proposed rule are due to NAFCU March 4; comments are due to the NCUA 60 days after publication in the Federal Register.
The alert also includes an in-depth analysis and poses questions for credit unions to consider. Subscribe to receive Regulatory Alerts.