Federal regulators have revamped the ratings system for bank trust activities.

Effective Jan. 1, the Uniform Interagency Trust Ratings System will resemble the Camels ratings system, which is what regulators use to evaluate the overall health of a bank.

The trust rating will consist of five components: management; operations, internal controls, and auditing; earnings; compliance; and asset management. The trust department will receive a score for each component as well as an overall grade.

The Federal Financial Institutions Examination Council, the umbrella group for the banking agencies, said examiners will have the option of providing a specific grade in the earnings component for trust units with less than $100 million of assets.

Examiners also do not have to provide an asset management grade if the trust department does not manage or advise any mutual funds or similar investment vehicles.

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