H.R. 3379

119th CONGRESS 1st Session

To amend the Federal Financial Institutions Examination Council Act of 1978 to require the Federal financial institutions regulatory agencies to update the CAMELS Rating System, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES · May 14, 2025 · Sponsor: Mr. Fitzgerald · Committee: Committee on Financial Services

Table of contents

• H.R. 3379
  • SEC. 1. Short title
  • SEC. 2. Findings
  • SEC. 3. Amendments to the CAMELS Rating System

SEC. 1. Short title

• This Act may be cited as the or the .

SEC. 2. Findings

• Congress finds that—
  • CAMELS ratings (Capital adequacy, Asset quality, Management, Earnings, Liquidity, and Sensitivity to market risk) are a critical tool for evaluating the safety and soundness of financial institutions, and the basis for determining significant regulatory matters such as the evaluation for mergers and acquisitions and a bank’s deposit insurance premiums;
  • the CAMELS rating system relies heavily on examiner judgment, which can lead to subjective and inconsistent ratings across similar institutions;
  • establishing clear, objective measures for each CAMELS component and their relative weighting in determining composite ratings will promote fairness, consistency, and accountability in supervisory assessments; and
  • examination and supervision, as well as the CAMELS rating system, should focus on a financial institution’s core financial condition or solvency.

SEC. 3. Amendments to the CAMELS Rating System

• (a) In general
  • The Federal Financial Institutions Examination Council Act of 1978 () is amended by adding at the end the following: 12 U.S.C. 3301 et seq.
    • (a) In general
      • The Council shall make recommendations to amend the Uniform Financial Institutions Rating System, and the CAMELS components thereunder, to—
        • establish clear and objective criteria for assessing each CAMELS component;
        • revise the factors affecting each CAMELS component to derive a composite rating that more accurately reflects the financial condition and risk profile of the financial institutions being rated;
        • either—
          • eliminate the management component of the CAMELS rating system; or
          • revise the management component of the CAMELS rating system to limit the assessment under such component to objective measures of the governance and controls used to manage an institution’s risk profile;
        • ensure that composite ratings consider the financial institution’s compliance with—
          • section 21 of the Federal Deposit Insurance Act (); 12 U.S.C. 1829b
          • chapter 2 of title I of (); Public Law 91–508; 12 U.S.C. 1951 et seq.
          • subchapter II of of title 31, United States Code; and chapter 53
          • any other applicable requirements and implementing regulations relating to the prevention of money laundering and terrorist financing; and
        • ensure that composite ratings are determined based on a transparent methodology that is limited to the objective criteria established for each CAMELS component.
    • (b) Rulemaking
      • Not later than 12 months after the Council makes the recommendations required under subsection (a), the Federal financial institutions regulatory agencies shall, jointly, issue rules to carry out the recommendations described under subsection (a).
    • (c) Public comment period
      • In issuing the rules required under subsection (b), the Federal financial institutions regulatory agencies shall—
        • publish a notice of proposed rulemaking with respect to such rules; and
        • provide for a public comment period of not less than 90 days.
    • (d) Rule of construction
      • Nothing in this section may be construed to limit the authority of the Federal financial institutions regulatory agencies to take supervisory or enforcement actions to ensure the safety and soundness of financial institutions.
• (b) Well managed definition
  • Section 2(o)(9)(A) of the Bank Holding Company Act of 1956 () is amended— 12 U.S.C. 1841(o)(9)(A)
    • by striking achievement ofand all that follows through and inserting a CAMEL;
    • by striking and inserting a period; and; and
    • by striking clause (ii).