Friday, June 10, 2016

Wisconsin CU Regulator to Add S to CAMEL

Effective July 1, Wisconsin's Office of Credit Unions (OCU) will add "Sensitivity to Market Risk" (S) component to CAMEL.

OCU wrote in a May 24 letter that it believes that the implementation of a "S" rating is prudent at this time.

OCU noted that changes in interest rates can impact the earnings and net worth of credit unions. OCU stated that credit unions are expected to have the ability to measure, monitor, and manage interest rate risk exposure.

OCU also pointed out that "[t]he utilization of S component recognizes the increasing balance sheet complexity in Wisconsin credit unions."

OCU noted that the National Credit Union Administration (NCUA) does not use the S CAMEL rating component. However, OCU and NCUA have agreed to a workaround. The lower of the "L" and "S" ratings will be inputted into NCUA's Automated Integrated Regulatory Examination Software for the L component in CAMEL.

On a related note, the NCUA Board on June 16th will receive a briefing on adding S to CAMEL.

Read the letter.

No comments:

Post a Comment


The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.