FFIEC Proposes New Bank Health Rating System After 30 Years

WASHINGTON DC, Jakartaweekly.com – The Federal Financial Institutions Examination Council (FFIEC) is proposing revisions to the CAMELS financial institution rating system to improve supervisory transparency and strengthen the focus of assessments on material financial risks.

The FFIEC is opening a 90-day public comment period on the proposal after it is published in the Federal Register via the Federal eRulemaking Portal.

FFIEC Chair and Vice Chair for Supervision of the Federal Reserve Board of Governors, Michelle W. Bowman, said the revision represents the first comprehensive update to the CAMELS framework in three decades.

“The revised CAMELS framework marks a clear shift toward transparency, quantitative factors, and supervisory predictability,” Bowman said on Tuesday, May 19, 2026.

CAMELS is a rating system used by regulators to assess the health and safety of financial institutions. Under the system, regulators evaluate six areas: capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk.

The FFIEC said the revision aims to strengthen the link between rating outcomes and the safety and soundness of financial institutions by emphasizing material financial risks.

However, the proposal retains the current basic CAMELS framework with several changes to composite rating definitions, assessment components, and evaluation factors.

The FFIEC was established under the Financial Institutions Regulatory and Interest Rate Control Act of 1978 to set uniform federal examination standards for financial institutions and to promote consistency in the supervision of the financial industry in the United States.

The council also provides training for examiners from various federal regulators and state financial supervisory agencies.

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