Bill > HR3379

This bill aims to improve the CAMELS Rating System, which is a critical tool used to evaluate the safety and soundness of financial institutions. Currently, CAMELS (which stands for Capital adequacy, Asset quality, Management, Earnings, Liquidity, and Sensitivity to market risk) relies heavily on examiner judgment, potentially leading to subjective ratings. The bill requires the Federal Financial Institutions Examination Council to recommend amendments to make the rating system more objective and transparent. Specifically, the bill seeks to establish clear criteria for assessing each CAMELS component, potentially eliminate or significantly revise the management component to focus on objective governance measures, and ensure that composite ratings are based on transparent, objective criteria. The bill also mandates that these ratings consider an institution's compliance with anti-money laundering and terrorist financing regulations. Additionally, the regulatory agencies must publish proposed rules with a 90-day public comment period and issue final rules within 12 months of the recommendations. The goal is to promote fairness, consistency, and accountability in supervisory assessments while maintaining the ability to take actions to ensure financial institutions' safety and soundness.

Business and Industry

https://www.congress.gov/bill/119th-congress/house-bill/3379/all-info