HUMPS Act of 2025
- Bill Number
- H.R. 3379
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2025-06-25: Placed on the Union Calendar, Calendar No. 136.
- Last Updated
- 2026-05-02T19:06:20Z
AI-Generated Summary
Purpose
The HUMPS Act of 2025 aims to modernize the CAMELS Rating System—a tool used by regulators to assess the safety and soundness of banks and other financial institutions—by making it more objective, consistent, and focused on core financial health rather than subjective judgments. CAMELS stands for Capital adequacy (enough capital to absorb losses), Asset quality (quality of loans and investments), Management (leadership effectiveness), Earnings (profitability), Liquidity (ability to meet short-term obligations), and Sensitivity to market risk (vulnerability to interest rate or market changes).
Key Provisions
- Congressional Findings: Recognizes CAMELS ratings as essential for decisions like mergers, acquisitions, and deposit insurance premiums, but notes their reliance on examiner judgment leads to inconsistencies. Emphasizes the need for objective measures to ensure fairness and focus on solvency (a bank's ability to pay its debts).
- Recommendations to Amend CAMELS:
- The Federal Financial Institutions Examination Council (FFIEC—a coordinating body for bank regulators) must recommend updates to establish clear, objective criteria for each CAMELS component.
- Revise how components are weighted to better reflect a bank's financial condition and risks.
- Either eliminate the subjective "Management" component or limit it to measurable aspects of governance and risk controls.
- Require composite (overall) ratings to include compliance with laws preventing money laundering and terrorist financing, such as the Bank Secrecy Act.
- Mandate a transparent, objective methodology for final ratings.
- Rulemaking Process: Within 12 months of FFIEC recommendations, federal bank regulators (e.g., Federal Reserve, FDIC, OCC) must jointly issue rules implementing these changes, including a 90-day public comment period.
- Preservation of Authority: Regulators retain full power to supervise or enforce actions for bank safety, unaffected by these updates.
- Update to "Well-Managed" Definition: Amends the Bank Holding Company Act to simplify the criteria for a bank holding company to be considered "well-managed," tying it solely to achieving a satisfactory CAMELS rating (removing prior references to management ratings).
Significant Changes to Existing Law
- Adds a new Section 1012 to the Federal Financial Institutions Examination Council Act of 1978, mandating objective reforms to the Uniform Financial Institutions Rating System (which includes CAMELS) for the first time.
- Modifies the Bank Holding Company Act of 1956 by streamlining the "well-managed" standard, eliminating redundant language about management performance to align with the revised CAMELS focus.
- Shifts from heavy reliance on subjective examiner opinions to quantifiable metrics, potentially standardizing ratings across institutions.
Potential Impacts
- Government Agencies: FFIEC and federal regulators will face new coordination and rulemaking requirements, increasing administrative workload but promoting uniform supervision. This could reduce disputes over inconsistent ratings.
- Citizens and Financial Institutions: Banks may experience fairer assessments, leading to more predictable costs for deposit insurance and easier approvals for expansions. Consumers could benefit from a more stable banking system with less risk of failures due to overlooked financial weaknesses.
- International Relations: Minimal direct impact, though standardized U.S. bank ratings might enhance global confidence in American financial oversight, indirectly affecting cross-border banking activities.
Main Stakeholders Affected
- Financial Institutions: Banks, thrifts, and holding companies, who rely on CAMELS ratings for operations, growth, and costs.
- Regulatory Agencies: FFIEC members, including the Federal Reserve, FDIC (insures deposits), OCC (oversees national banks), and others, responsible for implementation.
- Bank Customers and Investors: Indirectly affected through changes in bank stability and lending practices.
- Congress and Policymakers: Gains tools for oversight of banking supervision without expanding regulatory powers.
Notable Legal, Constitutional, or Political Implications
- Legal: Reinforces anti-money laundering compliance in ratings without creating new penalties, ensuring alignment with existing statutes like the Federal Deposit Insurance Act. The public comment requirement upholds procedural fairness under the Administrative Procedure Act.
- Constitutional: No apparent challenges; it enhances accountability in executive branch regulation without infringing on due process or separation of powers.
- Political: Promotes bipartisan goals of reducing regulatory subjectivity and focusing on financial risks, potentially easing tensions between banks and overseers. Could influence future banking reforms by setting a precedent for objective metrics in supervision.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Fitzgerald, Scott [R-WI-5]
Recent Actions
- 2025-06-25: Placed on the Union Calendar, Calendar No. 136.
- 2025-06-25: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-170.
- 2025-06-25: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-170.
- 2025-05-21: Ordered to be Reported (Amended) by the Yeas and Nays: 29 - 23.
- 2025-05-21: Committee Consideration and Mark-up Session Held
- 2025-05-14: Referred to the House Committee on Financial Services.
- 2025-05-14: Introduced in House
- 2025-05-14: Introduced in House
Bill Versions
- Halting Uncertain Methods and Practices in Supervision Act of 2025 — issued 2025-05-14 — PDF (4 pages)
- Halting Uncertain Methods and Practices in Supervision Act of 2025 — issued 2025-06-25 — PDF (8 pages)