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Has your credit union consistently received a CAMEL 1 or 2 rating from your regulator? Do you manage the credit union to that rating, and does your board judge your performance in large part based on the CAMEL rating? Congratulations on making the regulators happy, but managing the credit union to a CAMEL ratio does not necessarily mean you are satisfying the boss that matters most: the member owners.

Running the business based inordinately on CAMEL can have the unintended consequence of failing to manage for membership growth and has been confused, I fear, with a performance measurement for strategic success. Evaluating the true performance of a CU based on CAMEL is analogous to sending a baseball player to the All Star Game because he showed up to the stadium on time, didn’t miss curfew and had a shiny batting helmet.

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Peter Westerman


Credit Union Times

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