CAMELS ratings are assigned by NCUA based on information gathered, reviewed, and evaluated by the examiner, including an assessment of levels and directions of risk. A CAMELS rating will be assigned to the credit union at the conclusion of the examination cycle.
The CAMELS rating system is based upon an evaluation of six critical elements of a credit union’s operations.
The CAMELS rating is designed to consider and reflect all significant financial, operational, and management factors examiners assess in their evaluation of a credit union’s performance and risk profile.
Examiners rate credit unions based on their assessment of the individual credit union, not peer averages, which do not necessarily reflect whether credit unions are operated in a safe and sound manner. Examiners are expected to use their professional judgment and consider both qualitative and quantitative factors when analyzing a credit union’s performance. Because numbers are often lagging indicators of a credit union’s condition, the examiner also conducts a qualitative analysis of current and projected operations when assigning CAMELS ratings.
Part of the examiner’s qualitative analysis includes an assessment of the credit union’s risk management program. Examiners assess the amount and direction of risk exposure in seven categories: Credit, Interest Rate, Liquidity, Transaction, Compliance, Reputation, and Strategic risk. Examiners use this assessment when determining how the nature and extent of these risks affect one or more CAMELS components.
This chapter of the Examiner's Guide addresses:
Last updated April 29, 2022
