WASHINGTON, DC – Congressman Scott Fitzgerald (WI-05) introduced the Halting Uncertain Methods and Practices in Supervision (HUMPS) Act, which strengthens transparency in how banks are evaluated. The bill passed the House Financial Services Committee today by voice vote. Specifically, it directs the Federal Financial Institutions Examination Council (FFIEC) to revise the CAMELS rating system by establishing clear, objective standards for each component and updating the formula used to calculate a bank’s overall rating. It also calls for eliminating or reforming the subjective “Management” component, focusing instead on measurable risk governance and internal controls.
“The HUMPS Act brings much-needed transparency and accountability to the bank rating process,” said Congressman Scott Fitzgerald. “The CAMELS rating system has a real impact on how banks operate—but right now, it gives regulators too much room to apply double standards. This bill ensures that supervisory ratings are based on transparent, quantifiable metrics, not political bias or personal opinion. It’s a necessary step to prevent debanking by removing subjectivity from banking oversight.”
BACKGROUND: The CAMELS rating system—Capital adequacy, Asset quality, Management, Earnings, Liquidity, and Sensitivity to market risk—is a supervisory tool used by federal regulators to assess the health and safety of financial institutions. These confidential ratings significantly affect decisions around mergers and acquisitions, deposit insurance premiums, and whether a bank is considered “well managed” for regulatory purposes.
However, the current framework gives regulators broad discretion, particularly in the “Management” component, which is often based on subjective judgments rather than objective metrics. This discretion has raised concerns about politicized supervision and “debanking.” When a bank’s supervisory rating can be downgraded due to undefined or opaque criteria, institutions may choose to “de-risk” by avoiding lawful but politically disfavored customers. This creates a chilling effect on financial access and weakens trust in the neutrality of bank oversight.
SUPPORTERS: American Bankers Association, America’s Credit Unions, Bank Policy Institute, Financial Services Forum, and Wisconsin Bankers Association.
Read the bill text here.
