H.R.3379 - Halting Uncertain Methods and Practices in Supervision Act of 2025; HUMPS Act of 2025 (119th Congress)
Summary
H.R.3379, the Halting Uncertain Methods and Practices in Supervision Act of 2025 (HUMPS Act), aims to amend the Federal Financial Institutions Examination Council Act of 1978. The bill seeks to update the CAMELS Rating System used to evaluate the safety and soundness of financial institutions. The goal is to establish clearer, more objective criteria for assessing financial institutions, reducing reliance on examiner judgment and promoting consistency.
Expected Effects
The bill would require federal financial institutions regulatory agencies to update the CAMELS rating system. This update would involve establishing clear, objective criteria for each component, revising the weighting of components, and potentially eliminating or revising the management component. Rulemaking would be required within 12 months of the Council's recommendations, including a public comment period.
Potential Benefits
- Increased fairness and consistency in the evaluation of financial institutions.
- Enhanced accountability in supervisory assessments.
- More accurate reflection of the financial condition and risk profile of institutions.
- Greater transparency in the determination of composite ratings.
- Focus on core financial condition or solvency.
Potential Disadvantages
- Potential disruption to existing regulatory practices during the transition to the updated CAMELS system.
- Possible unintended consequences from changes to the weighting of CAMELS components.
- Risk that objective criteria may not fully capture all relevant aspects of an institution's condition.
- Costs associated with implementing the new rules and training examiners.
- Potential for increased regulatory burden on financial institutions during the transition period.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution, as it aims to improve the stability and soundness of the financial system. Congress has the power to regulate commerce, including financial institutions, as implied by Article I, Section 8. The requirement for public comment aligns with principles of transparency and accountability, though no specific constitutional provision mandates such comment periods for regulatory changes.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).