US Regulators Propose Overhaul of CAMELS Bank Rating Framework

CAMELS is a confidential supervisory rating system used by the US Federal Financial Institutions Examination Council (FFIEC) since 1996. It assesses banks on six components — capital adequacy, asset quality, management, earnings, liquidity and sensitivity to market risk — and assigns ratings from 1 to 5. The ratings influence mergers and acquisitions, business expansion and supervisory action.

On May 19, 2026, the FFIEC proposed the first comprehensive overhaul of the framework in nearly 30 years. The proposal would eliminate the “special consideration” given to the management component in determining the composite rating. Risk-management deficiencies would generally warrant a rating of 3 to 5 only if they pose material financial risk. The proposal sets no monetary threshold and retains the six components and 1-to-5 rating scale. Public comments are due by August 17.