The Federal Financial Institutions Examination Council formally proposed revisions to the Uniform Financial Institutions Rating System (UFIRS) — the CAMELS framework — in late May, following months of public previews from Fed Vice Chair for Supervision Michelle Bowman. The proposal is the first major update to the CAMELS system in years and would reshape how examiners score banks on capital, assets, management, earnings, liquidity, and sensitivity to risk.
The key change is a deliberate shift away from allowing the “M” (management) component to dominate or distort composite ratings. The proposal would eliminate an expectation that examiners give “special consideration” to management when assigning composite scores, would raise the bar for downgrading a bank to “deficient” on the management component, and would limit how specialty exam findings (consumer compliance, AML) affect ratings, requiring that they bear on overall financial condition or pose a material financial risk before they can pull down a CAMELS score. Comments are due in mid-August.
The OCC’s Comptroller Jonathan Gould, while supporting the proposal, flagged a concern that the management component has historically double-counted deficiencies already captured in other CAMELS components, and urged that management ratings provide “distinct, incremental value” rather than functioning as a secondary reflection of other scores.
Outlook: For well-capitalized banks that have historically received management or composite downgrades they felt were disproportionate to their financial condition, this proposal provides a path to more predictable ratings outcomes. Submit a comment by mid-August if your institution has experienced ratings actions driven primarily by governance or compliance process findings rather than underlying financial risk. Separately, begin documenting the financial materiality of any open MRA or MRIA, framing remediation in those terms will align with where supervision is clearly heading.
OCC bulletin: https://www.occ.gov/news-issuances/bulletins/2026/bulletin-2026-22.html