HR3379-119

What This Bill Does

The HUMPS Act changes how Federal bank regulators use the CAMELS rating system. The bill's findings say CAMELS ratings affect safety-and-soundness judgments, merger evaluations, and deposit insurance premiums, but rely heavily on examiner judgment that can produce subjective or inconsistent ratings. The operative section directs the Federal Financial Institutions Examination Council to recommend amendments to the Uniform Financial Institutions Rating System and CAMELS components. Those recommendations must establish clear and objective criteria, revise component factors or weighting to better reflect financial condition and risk profile, eliminate or limit the management component to objective governance and risk-control measures, consider compliance with anti-money-laundering and terrorist-financing laws in the reported text, and require a transparent methodology limited to objective criteria. Federal financial institutions regulatory agencies must jointly issue implementing rules within 12 months, publish a proposed rule, and provide at least a 90-day public comment period in the reported version.

Who Benefits and How

Community banks benefit if less subjective CAMELS ratings reduce inconsistent supervision and make ratings easier to contest or anticipate. Credit unions benefit from clearer rating criteria where CAMELS outcomes affect oversight and supervisory expectations. Bank holding companies benefit because the bill also updates a Bank Holding Company Act reference tied to CAMEL ratings. Bank compliance officers benefit from a more transparent methodology and public rulemaking. Financial institution trade associations benefit from a formal comment period on the revised rating system.

Who Bears the Burden and How

The Federal Financial Institutions Examination Council must develop recommendations for objective CAMELS criteria and methodology. FDIC examiner offices, OCC examiner offices, Federal Reserve examiner offices, and NCUA examiner offices must adapt examination practices after the joint rule. Federal banking regulators must issue rules within 12 months and manage at least a 90-day public comment period. Banks with anti-money-laundering compliance weaknesses may face continued or clearer negative rating effects because the reported text requires composite ratings to consider specified AML and terrorist-financing compliance laws.

Key Provisions

• Establishes congressional findings that CAMELS ratings rely heavily on examiner judgment and affect mergers, insurance premiums, and supervisory outcomes.
• Directs FFIEC to recommend objective criteria for each CAMELS component.
• Requires revisions to component factors or weighting so composite ratings better reflect financial condition and risk profile.
• Limits or eliminates the management component unless it uses objective governance and risk-control measures.
• Requires composite ratings to consider anti-money-laundering and terrorist-financing compliance in the reported text.
• Requires joint regulator rules within 12 months and at least a 90-day public comment period.