The HUMPS Act of 2025 requires federal banking regulators to overhaul the CAMELS rating system used to evaluate bank safety and soundness. CAMELS ratings assess banks on Capital adequacy, Asset quality, Management, Earnings, Liquidity, and Sensitivity to market risk, and these scores determine critical matters like merger approvals and deposit insurance premiums. The bill mandates that regulators establish clear, objective criteria for each rating component and either eliminate the subjective "Management" category entirely or limit it to measurable governance factors. Within 12 months of passage, banking agencies must jointly issue new rules after a 90-day public comment period to implement these changes. The legislation aims to reduce examiner subjectivity and create more consistent, transparent bank ratings focused primarily on financial condition rather than regulatory judgment calls.
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