Bank Policy Institute
08/17/2026 | Press release | Distributed by Public on 08/17/2026 14:50
BPI Comments on FFIEC’s CAMELS System
Ladies and Gentlemen:
The Bank Policy Institute supports the efforts of the Federal Financial Institutions Examination Council to revise the Uniform Financial Institutions Rating System, commonly referred to as CAMELS, to better focus ratings on material financial risks that may pose safety and soundness concerns.[1] The proposal includes necessary changes that would better rationalize the bank ratings process. This letter includes several additional, fundamental reforms that the FFIEC should adopt to ensure ratings accurately reflect banks' financial condition.
Introduction
The FFIEC's proposal to update the CAMELS framework is a meaningful step toward refocusing supervisory ratings on material financial risk.[2] BPI supports several of the proposed reforms, including recalibrating the emphasis on the Management component and limiting the influence of non-financial, process-related findings and specialty reviews on CAMELS outcomes. The FFIEC originally adopted CAMELS in 1979 and, until now, revisited the framework only once. Since 1979, the role of CAMELS has significantly expanded. Today, CAMELS ratings operate as binding regulatory triggers with outsize legal and practical consequences. Because of this, additional reforms are necessary to ensure the framework is objective, predictable, and fit for its current purpose. This letter recommends revisions to the proposal intended to strengthen the proposed reforms.
To read the full comment letter, please click here, or click on the download button below.
[1] The Bank Policy Institute is a nonpartisan public policy, research, and advocacy group that represents universal banks, regional banks, and the major foreign banks doing business in the United States. BPI produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.
[2] Uniform Financial Institutions Rating System, 91 Fed. Reg. 29,128 (May 19, 2026).
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