In an April 10 letter to state-chartered credit unions, the Michigan Office of Credit Unions announced that its was moving from CAMEL to CAMELS.
The Office of Credit Unions wrote that it believed this was a prudent time to make the change by adding the Sensitivity component.
The Sensitivity or "S" component of CAMELS examines the impact of interest rate changes on net income and net worth of a credit union. It also looks at the ability of a credit union to measure, monitor, and manage its interest rate risk exposure.
The letter notes that while the Federal Financial Institutions Examination Council adopted a Sensitivity rating in 1997, NCUA never implemented this component.
Well, I guess it is better late than never.
When will NCUA join the party by adding S to the end of CAMEL?
Read the letter.
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