Adding a new component, and modifying an existing one, in NCUA’s CAMEL rating system would provide greater clarity and transparency, CUNA wrote to NCUA Monday. NCUA proposed to add an “S” for “sensitivity risk” to the CAMEL system, separating it from the “L” for “liquidity risk.”

“We agree with the NCUA that adding an ‘S’ component and modifying the ‘L’ component would provide greater clarity and transparency regarding credit unions’ sensitivity to market risk and liquidity risk exposures,” the letter reads. “Further, the proposed addition would make the NCUA’s rating system more consistent with the other financial institution regulators’ ratings system both at the federal and state levels.”

The letter also requests the final rule clarify that the change made to the CAMEL rating system should not, by itself, impact a credit union’s rating.

“The agency should instruct examiners to review situations where a credit union’s rating may decline, potentially as a result of separating this single component into two components,” the letter reads. “Such a result should not occur since the intent of the proposed change is to simply provide greater clarity of the assessment of each risk area.”