SMART Act of 2025

Bill: 119-hr-4437
Sponsor: full_name: Rep. Timmons, William R. [R-SC-4]
Introduced: 2025-07-16
Policy area: Finance and Financial Sector
Subjects: Bank accounts, deposits, capital

Banking and financial institutions regulation

Business records

Congressional oversight

Corporate finance and management

Government studies and investigations
Latest action: action_date: 2025-09-08
text: Placed on the Union Calendar, Calendar No. 206.

Summaries:

tv_txt: IB Union Calendar No. 206 119th CONGRESS 1st Session H. R. 4437 [Report No. 119–249] IN THE HOUSE OF REPRESENTATIVES July 16, 2025 Mr. Timmons (for himself and Mr. Foster ) introduced the following bill; which was referred to the Committee on Financial Services September 8, 2025 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed Strike out all after the enacting clause and insert the part printed in italic For text of introduced bill, see copy of bill as introduced on July 16, 2025 A BILL To reduce the regulatory burden on certain well managed and well capitalized financial institutions, and for other purposes.

1. Short title This Act may be cited as the Supervisory Modifications for Appropriate Risk-based Testing Act of 2025 or the SMART Act of 2025 . 2. Examination relief for certain well managed and well capitalized financial institutions (a) Insured depository institutions Section 10(d) of the Federal Deposit Insurance Act ( 12 U.S.C. 1820(d) ) is amended by adding at the end the following: (11) Examination relief for certain well managed and well capitalized insured depository institutions (A) In general The following shall apply to a well managed and well capitalized insured depository institution with $6,000,000,000 or less in consolidated assets: (i) Alternating limited-scope examinations After an insured depository institution receives a full-scope, on-site examination from the appropriate Federal banking agency, the next examination of the insured depository institution by the appropriate Federal banking agency shall be a limited-scope examination, as determined by the appropriate Federal banking agency. (ii) Combined examinations If an insured depository institution is otherwise subject to separate safety and soundness examinations, consumer compliance examinations, and information technology and cybersecurity examinations, the appropriate Federal banking agency shall, upon request of the insured depository institution, combine two or three such examinations, as specified by the insured depository institution, and carry them out at the same time. (B) Exception Subparagraph (A) shall not apply to an insured depository institution if— (i) the insured depository institution is currently subject to a formal enforcement proceeding or order by the Corporation or the appropriate Federal banking agency; or (ii) a person acquired control of the insured depository institution since the most recent full-scope, on-site examination of the insured depository institution from the appropriate Federal banking agency. (C) Rulemaking Not later than 12 months after the date of enactment of this paragraph, the Federal banking agencies shall issue rules to carry out subparagraph (A), including, with respect to an insured depository institution described under subparagraph (A), to— (i) establish procedures for the limited-scope examinations described in subparagraph (A)(i); (ii) establish procedures for reviewing insured depository institutions that— (I) experience material changes in financial condition or operational risk profile between scheduled examinations; or (II) have failed to comply with Federal or State banking laws and regulations; and (iii) balance the goals of streamlining the examination cycle for individual insured depository institutions and reducing unnecessary regulatory burdens while maintaining sufficient oversight to ensure the continued safety and soundness of the insured depository institutions and compliance with all applicable laws and regulations. (D) Rule of construction Nothing in this paragraph may be construed to limit the authority of a Federal banking agency to conduct off-site monitoring, targeted reviews, or additional full-scope, on-site examinations of an insured depository institution if the Federal banking agency determines such monitoring, reviews, or examinations are necessary to ensure safety and soundness or compliance with applicable laws. (E) Definitions In this paragraph: (i) Consumer compliance examination The term consumer compliance examination means an examination to assess compliance with the requirements of Federal consumer financial law (as such term is defined in section 1002 of the Consumer Financial Protection Act of 2010). (ii) Well capitalized The term well capitalized has the meaning given that term in section 38(b). (iii) Well managed With respect to an insured depository institution, the term well managed means that, when the institution was most recently examined by the appropriate Federal banking agency, the institution was found to be well managed, and the institution’s composite condition was found to be satisfactory or outstanding. . (b) Insured credit unions Section 204 of the Federal Credit Union Act ( 12 U.S.C. 1784 ) is amended by adding at the end the following: (h) Examination relief for certain well managed and well capitalized insured credit unions (1) In general The following shall apply to a well managed and well capitalized insured credit union with $6,000,000,000 or less in consolidated assets: (A) Alternating limited-scope examinations After an insured credit union receives a full-scope, on-site examination from the National Credit Union Administration, the next examination of the insured credit union by the National Credit Union Administration shall be a limited-scope examination, as determined by the National Credit Union Administration. (B) Combined examinations If an insured credit union is otherwise subject to separate safety and soundness examinations, consumer compliance examinations, and information technology and cybersecurity examinations, the National Credit Union Administration shall, upon request of the insured credit union, combine two or three such examinations, as specified by the insured credit union, and carry them out at the same time. (2) Exception Paragraph (1) shall not apply to an insured credit union if the insured credit union is currently subject to a formal enforcement proceeding or order by the National Credit Union Administration. (3) Rulemaking Not later than 12 months after the date of enactment of this subsection, the National Credit Union Administration shall issue rules to carry out paragraph (1), including, with respect to an insured credit union described under paragraph (1), to— (A) establish procedures for the limited-scope examinations described in paragraph (1)(A); (B) establish procedures for reviewing insured credit unions that— (i) experience material changes in financial condition or operational risk profile between scheduled examinations; or (ii) have failed to comply with Federal or State banking laws and regulations; and (C) balance the goals of streamlining the examination cycle for individual insured credit unions and reducing unnecessary regulatory burdens while maintaining sufficient oversight to ensure the continued safety and soundness of the insured credit unions and compliance with all applicable laws and regulations. (4) Rule of construction Nothing in this subsection may be construed to limit the authority of the National Credit Union Administration to conduct off-site monitoring, targeted reviews, or additional full-scope, on-site examinations of an insured credit union if the National Credit Union Administration determines such monitoring, reviews, or examinations are necessary to ensure safety and soundness or compliance with applicable laws. (5) Definitions In this paragraph: (A) Consumer compliance examination The term consumer compliance examination means an examination to assess compliance with the requirements of Federal consumer financial law (as such term is defined in section 1002 of the Consumer Financial Protection Act of 2010). (B) Well capitalized The term well capitalized has the meaning given that term in section 216(c). (C) Well managed With respect to an insured credit union, the term well managed means that, when the credit union was most recently examined by the National Credit Union Administration, the credit union was found to be well managed, and the credit union’s composite condition was found to be satisfactory or outstanding. . 3. Examination practices (a) Insured depository institutions Section 10(d) of the Federal Deposit Insurance Act ( 12 U.S.C. 1820(d) ), as amended by section 2(a), is further amended by adding at the end the following: (12) Examination practices With respect to on-site examination of an insured depository institution with less than $6,000,000,000 in total assets, the appropriate Federal banking agency shall— (A) ensure the examination is led by, to the maximum extent practicable, an examiner with significant experience as an examiner; (B) make every effort, to the maximum extent practicable, to minimize the number of examiners utilized and the amount of time spent at the institution to carry out the examination; (C) make every effort, to the maximum extent practicable, to schedule the examination at a time that is convenient for the institution; and (D) to the maximum extent practicable, give the institution advance notice of issues expected to be covered in the examination. (13) Report In its annual report to Congress, each Federal banking agency shall include— (A) information on how the agency is complying with paragraphs (11) and (12); and (B) aggregate data summarizing the agency’s examination practices with respect to insured depository institutions with less than $6,000,000,000 in total assets, including— (i) the average experience of examiners, including the average number of years of examiner experience of those who lead on-site examinations; (ii) the average number of examiners utilized; and (iii) the average amount of time the agency spends visiting such institutions for on-site examinations. . (b) Insured credit unions Section 204 of the Federal Credit Union Act ( 12 U.S.C. 1784 ), as amended by section 2(b), is further amended by adding at the end the following: (i) Examination practices With respect to on-site examination of an insured credit union with less than $6,000,000,000 in total assets, the National Credit Union Administration shall— (1) ensure the examination is led by, to the maximum extent practicable, an examiner with significant experience as an examiner; (2) make every effort, to the maximum extent practicable, to minimize the number of examiners utilized and the amount of time spent at the credit union to carry out the examination; (3) make every effort, to the maximum extent practicable, to schedule the examination at a time that is convenient for the credit union; and (4) to the maximum extent practicable, give the credit union advance notice of issues expected to be covered in the examination. (j) Report In its annual report to Congress, the National Credit Union Administration shall include— (1) information on how the Administration is complying with subsections (h) and (i); and (2) aggregate data summarizing the Administration’s examination practices with respect to insured credit unions with less than $6,000,000,000 in total assets, including— (A) the average experience of examiners, including the average number of years of examiner experience of those who lead on-site examinations; (B) the average number of examiners utilized; and (C) the average amount of time the Administration spends visiting such credit unions for on-site examinations. .

September 8, 2025 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

tv_txt: I 119th CONGRESS 1st Session H. R. 4437 IN THE HOUSE OF REPRESENTATIVES July 16, 2025 Mr. Timmons (for himself and Mr. Foster ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To reduce the regulatory burden on certain well managed and well capitalized financial institutions, and for other purposes.

1. Short title This Act may be cited as the Supervisory Modifications for Appropriate Risk-based Testing Act of 2025 or the SMART Act of 2025 . 2. Examination relief for certain well managed and well capitalized financial institutions (a) Insured depository institutions Section 10(d) of the Federal Deposit Insurance Act ( 12 U.S.C. 1820(d) ) is amended by adding at the end the following: (11) Examination relief for certain well managed and well capitalized insured depository institutions (A) In general The following shall apply to a well managed and well capitalized insured depository institution with $6,000,000,000 or less in consolidated assets: (i) Alternating limited-scope examinations After an insured depository institution receives a full-scope, on-site examination from the appropriate Federal banking agency, the next examination of the insured depository institution by the appropriate Federal banking agency shall be a limited-scope examination, as determined by the appropriate Federal banking agency. (ii) Combined examinations If an insured depository institution is otherwise subject to separate safety and soundness examinations, consumer compliance examinations, and information technology and cybersecurity examinations, the appropriate Federal banking agency shall, upon request of the insured depository institution, combine two or three such examinations, as specified by the insured depository institution, and carry them out at the same time. (B) Exception Subparagraph (A) shall not apply to an insured depository institution if— (i) the insured depository institution is currently subject to a formal enforcement proceeding or order by the Corporation or the appropriate Federal banking agency; or (ii) a person acquired control of the insured depository institution since the most recent full-scope, on-site examination of the insured depository institution from the appropriate Federal banking agency. (C) Rulemaking Not later than 12 months after the date of enactment of this paragraph, the Federal banking agencies shall issue rules to carry out subparagraph (A), including, with respect to an insured depository institution described under subparagraph (A), to— (i) establish procedures for the limited-scope examinations described in subparagraph (A)(i); (ii) establish procedures for reviewing insured depository institutions that— (I) experience material changes in financial condition or operational risk profile between scheduled examinations; or (II) have failed to comply with Federal or State banking laws and regulations; and (iii) balance the goals of streamlining the examination cycle for individual insured depository institutions and reducing unnecessary regulatory burdens while maintaining sufficient oversight to ensure the continued safety and soundness of the insured depository institutions and compliance with all applicable laws and regulations. (D) Rule of construction Nothing in this paragraph may be construed to limit the authority of a Federal banking agency to conduct off-site monitoring, targeted reviews, or additional full-scope, on-site examinations of an insured depository institution if the Federal banking agency determines such monitoring, reviews, or examinations are necessary to ensure safety and soundness or compliance with applicable laws. (E) Definitions In this paragraph: (i) Consumer compliance examination The term consumer compliance examination means an examination to assess compliance with the requirements of Federal consumer financial law (as such term is defined in section 1002 of the Consumer Financial Protection Act of 2010). (ii) Well capitalized The term well capitalized has the meaning given that term in section 38(b). (iii) Well managed With respect to an insured depository institution, the term well managed means that, when the institution was most recently examined by the appropriate Federal banking agency, the institution was found to be well managed, and the institution’s composite condition was found to be satisfactory or outstanding. . (b) Insured credit unions Section 204 of the Federal Credit Union Act ( 12 U.S.C. 1784 ) is amended by adding at the end the following: (h) Examination relief for certain well managed and well capitalized insured credit unions (1) In general The following shall apply to a well managed and well capitalized insured credit union with $6,000,000,000 or less in consolidated assets: (A) Alternating limited-scope examinations After an insured credit union receives a full-scope, on-site examination from the National Credit Union Administration, the next examination of the insured credit union by the National Credit Union Administration shall be a limited-scope examination, as determined by the National Credit Union Administration. (B) Combined examinations If an insured credit union is otherwise subject to separate safety and soundness examinations, consumer compliance examinations, and information technology and cybersecurity examinations, the National Credit Union Administration shall, upon request of the insured credit union, combine two or three such examinations, as specified by the insured credit union, and carry them out at the same time. (2) Exception Paragraph (1) shall not apply to an insured credit union if the insured credit union is currently subject to a formal enforcement proceeding or order by the National Credit Union Administration. (3) Rulemaking Not later than 12 months after the date of enactment of this subsection, the National Credit Union Administration shall issue rules to carry out paragraph (1), including, with respect to an insured credit union described under paragraph (1), to— (A) establish procedures for the limited-scope examinations described in paragraph (1)(A); (B) establish procedures for reviewing insured credit unions that— (i) experience material changes in financial condition or operational risk profile between scheduled examinations; or (ii) have failed to comply with Federal or State banking laws and regulations; and (C) balance the goals of streamlining the examination cycle for individual insured credit unions and reducing unnecessary regulatory burdens while maintaining sufficient oversight to ensure the continued safety and soundness of the insured credit unions and compliance with all applicable laws and regulations. (4) Rule of construction Nothing in this subsection may be construed to limit the authority of the National Credit Union Administration to conduct off-site monitoring, targeted reviews, or additional full-scope, on-site examinations of an insured credit union if the National Credit Union Administration determines such monitoring, reviews, or examinations are necessary to ensure safety and soundness or compliance with applicable laws. (5) Definitions In this paragraph: (A) Consumer compliance examination The term consumer compliance examination means an examination to assess compliance with the requirements of Federal consumer financial law (as such term is defined in section 1002 of the Consumer Financial Protection Act of 2010). (B) Well capitalized The term well capitalized has the meaning given that term in section 216(c). (C) Well managed With respect to an insured credit union, the term well managed means that, when the credit union was most recently examined by the National Credit Union Administration, the credit union was found to be well managed, and the credit union’s composite condition was found to be satisfactory or outstanding. .