119-hr4437

[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