Preparing for Examinations: The CAMEL Rating
by: Shea Dittrich, Director Financial Institutions Group, Sageworks, Inc.
A camel’s primary purpose for centuries was to carry tremendous loads for long journeys. Similarly, regulations, including the CAMEL rating, have been established to ensure that credit unions can sustain long-term health and to balance risk management and consumer protection. The CAMEL rating is a measure of a credit union’s riskiness, as it incorporates: Capital Adequacy, Asset Quality, Management, Earnings, and Liquidity.
