ALEXANDRIA, Va. — NCUA is looking at whether the infamous CAMEL Matrix has outlived its usefulness and should be tossed in the circular file.

The CAMEL Matrix used by NCUA and some state regulators is a set of basic ratio guidelines to help examiners determine the proper CAMEL ratings for credit unions. It is also shared with credit unions to help them know what to expect from an examination.

However, the matrix has long been criticized as out-dated and "one-size-fits-all." Just over a year ago, NCUA issued a Letter to Federal Credit Unions 06-FCU-04 to share with credit unions that the agency executives are working to train examiners not to rely strictly on the matrix. In particular, with earnings waning at credit unions over the last couple of years, the Supervisory Letter to exam staff, attached to the one shared with federal credit unions, emphasized that the 1% return on assets was intended as guidance for a CAMEL 1 rating–the highest level–but not an automatic requirement.