H.R. 4437

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4437 Referred in Senate (RFS)]

<DOC>
119th CONGRESS
2d Session
H. R. 4437

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

May 13, 2026

Received; read twice and referred to the Committee on Banking, Housing, 
and Urban Affairs

_______________________________________________________________________

AN ACT

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.''.

Passed the House of Representatives May 12, 2026.

Attest:

KEVIN F. MCCUMBER,

Clerk.