What was proposed
On May 19, 2026, the FFIEC agencies published a notice and request for comment on revisions to the Uniform Financial Institutions Rating System, which everyone calls CAMELS. The system keeps its structure: a composite rating and six component ratings, each on a one-to-five scale. What changes is how the ratings are defined and what examiners may consider. The proposal covers banks and credit unions, and comments were due about 90 days after publication.
What would change for the management rating
| Topic | Proposed change |
|---|---|
| Evaluation factors | Three factors would be removed from the management component: management depth and succession, responsiveness to auditor and supervisory recommendations, and willingness to serve the community’s legitimate banking needs. A fourth, overall performance and risk profile, is dropped as redundant. |
| What it takes to get a 3 or worse | Management would generally receive a 3 or worse only when risk management weaknesses create material financial risk. Unreliable financial or regulatory reporting, failure to safeguard assets, or significant noncompliance with law could also support one. |
| Weight in the composite | The language giving management special consideration in the composite rating would be removed, so the components are weighed more evenly. |
| Findings from specialty reviews | Findings from reviews of IT, BSA/AML, consumer compliance, CRA and similar areas would affect the ratings only if they affect overall financial condition, pose material financial risk or reflect significant noncompliance. |
| Extra factors | Examiners could consider factors beyond those listed only in exceptional circumstances or where business practices are evolving, and would have to document why. |
The proposal also would not allow a composite 4 or worse on risk management weaknesses alone, without observable financial deterioration or material financial risk.
What it does not change
It remains a proposal. The agencies have not said when they will finalize it or whether the final version will match, and the rating your bank receives at its next exam will be set under the current system. Even under the proposal, management weaknesses can still lower a rating when they produce material financial risk, unreliable reporting, unsafeguarded assets or significant noncompliance. The proposal narrows the reasons for a low management rating. It does not remove them.
What to do now
- Do not rewrite your program around the proposal. Plan for the current rules until a final version is published.
- Learn how your management rating is built today. Look at your last report of examination and trace which findings fed it. That shows how much of the rating rests on the factors the proposal would remove.
- Keep fixing findings and keep succession planning. Responsiveness to examiners and management depth would no longer be rated factors, but they still protect the bank.
- Keep specialty reviews rigorous. IT, BSA and compliance findings would count less toward ratings, but the underlying requirements and the enforcement tools are unchanged.
- Watch for the final version. Compare it with the proposal and see which of the changes above survived.
Our regulatory advisory team helps community banks understand how their ratings are built and prepare for changes to the system.