HUMPS Act of 2025

This legislation aims to reform the Uniform Financial Institutions Rating System, commonly known as CAMELS, which is a critical tool for evaluating the safety and soundness of financial institutions. Congress identified that the current system relies heavily on subjective examiner judgment, leading to inconsistent ratings across similar institutions and a need for more objective measures. The bill mandates the Federal Financial Institutions Examination Council (FFIEC) to recommend amendments that establish clear and objective criteria for assessing each CAMELS component and revise how composite ratings are derived to better reflect a financial institution's true financial condition and risk profile. Specifically, it requires either eliminating the management component or revising it to limit assessment to objective measures of governance and controls. Additionally, the recommendations must ensure composite ratings consider compliance with anti-money laundering and counter-terrorist financing requirements, based on a transparent methodology. Following the FFIEC's recommendations, federal financial regulatory agencies are required to jointly issue rules within 12 months to implement these changes. This rulemaking process must include a 90-day public comment period. The overall objective is to promote fairness, consistency, and accountability in supervisory assessments, while explicitly not limiting agencies' authority to ensure financial institution safety and soundness.