ALEXANDRIA, Va. — Long criticized as out-dated and “one-size-fits-all,” the CAMEL Matrix used by NCUA and NASCUS could soon be a thing of the past.
NCUA announced today that it is working with NASCUS and the credit union trade groups to discuss the possible elimination of the CAMEL Matrix. Last year, NCUA Director of Examination & Insurance Dave Marquis issued a Supervisory Letter to examiners earlier this year that was shared with credit unions stating that the 1% ROA requirement included in the matrix was not a hard and fast rule.
NCUA said it will continue to use the CAMEL internal rating system and is confining its review to the matrix, an optional examiner tool.
The Matrix currently consists of static ratio benchmarks, NCUA explained. CAMEL is not an arithmetic score or a comparison to other credit unions of similar asset sizes. An examiner's overall assessment of the credit union is based on numerous factors. As stated in Letter to Credit Unions Number 03-CU-04, “CAMEL is not intended to be used as a report card but as an internal tool to measure risk and allocate resources for supervision purposes.”
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