ALEXANDRIA, Va. — NCUA has ended the use of the CAMEL matrix in favor of risk based examinations, according to a letter to federal credit unions released Dec. 18.
"NCUA is concerned some credit unions may target and measure performance against the Matrix rather than focus on broader risk management. Targeting CAMEL benchmarks in the Matrix can lead to unsafe and unsound goals and may lead to poor business decisions," the agency wrote.
As one example, the agency discussed the how the matrix differs from risk based risk assessment in capital adequacy.
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