ARLINGTON, Va.–A plan by NCUA to add an “S” to its CAMEL rating system for market risk “sensitivity: could take at least three more years, according to a report by the agency’s Office of Inspector General (OIG).
The item was included in the agency’s semi-annual report to Congress, and was first reported by Regulatory Report.
The announcement marks a significant delay in adding the market risk sensitivity component to CAMEL ratings, as NCUA had earlier indicated it had targeted year-end 2018 for making the addition.
But now the OIG says making the change will require a public notice and comment period, followed by approval by the NCUA board, and then what it called “cohering regulation and system changes.”
But there are other reasons for the delay, as well, according to the OIG, including NCUA’s ongoing and significant effort to update a number of legacy systems, known as the Enterprise Solutions Modernization program.
‘Optional Part’
The OIG said that program is expected to include the ability to assign and capture the “S” component “as an optional part of the CAMEL rating.” The agency is projecting the system change will be in place by mid-2020.
Once in place, the agency said NCUA will then have the option of adding the “S” to the CAMEL rating “if the board so chooses.” It will also be able to capture the “S” rating for federally insured state-chartered credit unions in the states where the state regulators have added the “S” rating.
The full OIG report can be found in CUToday.info’s The Gov here.