[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4437 Reported in House (RH)]
<DOC>
Union Calendar No. 206
119th CONGRESS
1st Session
H. R. 4437
[Report No. 119-249]
To reduce the regulatory burden on certain well managed and well
capitalized financial institutions, and for other purposes.
_______________________________________________________________________
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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 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''.
SEC. 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.''.
SEC. 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.''.
Union Calendar No. 206
119th CONGRESS
1st Session
H. R. 4437
[Report No. 119-249]
_______________________________________________________________________
A BILL
To reduce the regulatory burden on certain well managed and well
capitalized financial institutions, and for other purposes.
_______________________________________________________________________
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