HB 3379, the HUMPS Act of 2025, would amend the Federal Financial Institutions Examination Council Act of 1978 to require the agencies to update the CAMELS rating framework. The bill directs the FFIEC to establish clear, objective criteria for each CAMELS component, revamp the weighting for composite ratings, and consider eliminating or redefining the management component.
It would also require that composite ratings reflect compliance with key anti-money laundering and related regulations. The act would trigger joint rulemaking by the agencies, with a public notice and a minimum 90-day comment period, and would set a 12-month deadline for final rules after recommendations are made.
A parallel amendment to the Bank Holding Company Act would redefine “well managed” to emphasize CAMEL achievement.
At a Glance
What It Does
The Council shall amend the Uniform Financial Institutions Rating System and CAMELS components to establish objective criteria, adjust weights for a more accurate composite rating, and potentially modify or remove the management component. It also requires consideration of AML/financing rules in the composite rating.
Who It Affects
Regulatory agencies within the FFIEC and the banks and holding companies they supervise, including risk-management, compliance, and governance functions.
Why It Matters
This could standardize supervisory assessments, reduce subjectivity, and influence capital planning, M&A decisions, and regulatory actions by providing a transparent, criteria-based framework.
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What This Bill Actually Does
The HUMPS Act would overhaul how CAMELS ratings are constructed and used in bank supervision. By mandating clear criteria for each CAMELS component and a transparent methodology for the composite rating, it aims to reduce reliance on examiner judgment and improve consistency across institutions.
The bill also pushes regulators to address whether the management component should be retained at all, and if kept, how it should be measured in governance terms. In addition, the legislation would require the new framework to account for compliance with major financial crime and regulatory requirements, tying CAMELS scores to broader risk controls.
To implement these changes, the act requires the FFIEC to prepare recommendations, after which the federal banking agencies must jointly issue implementing rules within 12 months. A public comment period of at least 90 days is mandated, ensuring stakeholder input.
Separately, the Well Managed definition for bank holding companies is being revised to focus on CAMEL achievement, aligning legal language with the CAMELS reform.
The Five Things You Need to Know
The Council must amend CAMELS criteria to include clear, objective measures for each component.
The bill permits eliminating or revising the management component of CAMELS.
Composite CAMELS ratings must be based on an objective, transparent methodology.
Rules to implement the recommendations must be issued within 12 months of the recommendations.
The Well Managed definition for bank holding companies is being revised to emphasize CAMEL achievement.
Section-by-Section Breakdown
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Amend CAMELS framework and governance criteria
Section 1012 directs the FFIEC to propose amendments to the CAMELS framework, including establishing objective criteria for each component and revising how the composite rating is calculated to better reflect a financial institution’s condition. It also allows for the removal or major revision of the management component to focus on governance and controls, while ensuring that ratings consider compliance with AML and related requirements.
Rewrite Well Managed Definition
The Well Managed definition within the Bank Holding Company Act is amended to replace the language around the achievement of a CAMEL with language that ties well-managed status to attaining a CAMEL. The provision also removes an ancillary clause, tightening the definition to a CAMEL-focused standard in governance and risk management.
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Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Regulators at FFIEC member agencies, who gain clearer, objective criteria to apply consistently across institutions.
- Banks and thrifts with governance and risk controls that already meet or exceed objective CAMELS standards, benefitting from clearer expectations and potentially fairer assessments.
- Bank examiners and risk-management professionals, who will operate under standardized, transparent metrics rather than subjective judgments.
- Investors and market analysts relying on CAMELS-derived signals for risk assessment.
- Industry associations and auditors that provide CAMELS-related services may see a more predictable regulatory environment.
Who Bears the Cost
- Banks and bank holding companies that must align internal systems and data pipelines to new CAMELS metrics and documentation.
- Compliance teams and internal control departments tasked with capturing new data elements and evidence for the objective measures.
- Regulators will incur short-term rulemaking and implementation costs to develop, publish, and enforce new CAMELS criteria and AML-related considerations.
- Smaller banks with limited resources may face higher relative compliance costs and data management burdens while adapting to the new framework.
Key Issues
The Core Tension
Balancing the benefits of objective, transparent CAMELS metrics with the risk of oversimplifying governance and risk management into a fixed scoring system, potentially overlooking nuanced, institution-specific factors.
The HUMPS Act introduces a move toward objective CAMELS criteria, which should reduce the discretion of examiners in rating divisions of safety and soundness. However, the shift could produce implementation challenges, especially for institutions with legacy governance structures or data gaps that make it harder to demonstrate compliance with the new objective criteria.
The public rulemaking process adds time to the transition and may reveal divergent stakeholder views on whether the management component should be retained or eliminated, and how best to measure governance in a way that’s both rigorous and practical.
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