SMART Act of 2025

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4437) to reduce the regulatory burden on certain well managed and well capitalized financial institutions, and for other purposes, as amended.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days to revise and extend their remarks and include extraneous material on this bill.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise today in enthusiastic support of my friend from South Carolina (Mr. Timmons) and his SMART Act.

Community banks and credit unions play a vital role in all of our local communities across our Nation, often serving as the primary source of credit, particularly in rural and underserved communities.

These institutions support small businesses and small farms and help hardworking Americans achieve homeownership and long-term financial stability.

Too often, well-managed institutions are burdened by duplicative and outdated regulatory requirements. These unnecessary burdens divert time, staff, and resources away from lending and supporting their local economies and toward a check-the-box compliance process that does not make the financial system any safer or any sounder.

The SMART Act offers a practical, commonsense solution by streamlining and simplifying limited-scope exams for smaller, well- capitalized, and well-managed institutions, while fully preserving the safety and soundness standards.

This targeted supervisory relief reduces unnecessary burden, eliminates duplicative reviews, and frees community banks to focus on lending and those goals of serving their customers.

Regulators should recognize that financial institutions with a strong track record should not be subject to the same regulatory scrutiny as institutions that are under financial stress, poorly managed, or quite large and complex.

Furthermore, the SMART Act makes further improvements to bank and credit union examinations, encouraging Federal regulators to improve examination practices by assigning experienced examiners, minimizing unnecessary onsite disruptions, and ensuring exams are conducted in a more efficient and predictable manner.

Washington should not create unnecessary burdens that make it even harder for small public or privately held community banks and their credit union competitors to try to compete and serve their Main Street customer base.

The SMART Act is a practical, bipartisan step that preserves the strength of community institutions, keeps regulators focused on the areas of greatest risk, and supports a healthier, more balanced financial system for all Americans.

Mr. Speaker, I urge my colleagues to support the SMART Act, and I reserve the balance of my time.

Mr. Speaker, I include in the Record the CBO estimate for the bill.

Mr. Speaker, I yield 2 minutes to the gentleman from South Carolina (Mr. Timmons), my friend and the chairman of the Subcommittee on Military and Foreign Affairs, and an outstanding, very active member of our House Committee on Financial Services.

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, I thank the gentleman from Illinois (Mr. Foster), who is the ranking member of our Subcommittee on Financial Institutions, working hand in glove with my friend from South Carolina (Mr. Timmons) who addressed the House. Together, they show the best of the Congress. They are focused on where the rubber hits the road for most all the customers in America, and that is our community banks.

I have said many times on this House floor that if you are concerned about housing, you ought to be concerned about our Main Street community banks because they, Mr. Speaker, deliver. Six out of 10 home construction loans are made by those banks under $10 billion.

Today, we are here to talk about providing some examination coordination. Examinations that give very targeted relief to the very best--well-capitalized, well-managed, unblemished, not connected to a merger or acquisition activity--community banks to let them better coordinate their routine exam process.

Mr. Speaker, I have worked at banks of that size, and I know the confusion of multiple exams that are uncoordinated between the agencies and come like waves, one after another, from which there is no relief. The same small compliance group dedicated in that bank under $6 billion is avalanched by these requests from the FDIC, the Federal Reserve, the OCC, the State Bank Department, the NASD, now FINRA for a broker dealer, a trust exam, an IT exam. There is no end to it.

This kind of coordination is so valuable to these often entrepreneurially

owned Main Street banks under $6 billion as described by the gentleman from Illinois (Mr. Foster) and the gentleman from South Carolina (Mr. Timmons). It is a powerful change, Mr. Speaker, because probably 8 out of 10 banks in the country under $6 billion would meet that test. I am sure there are between 3,000 and 4,000 banks that meet the definitions in this bill. That is real regulatory relief for real bankers who are serving real customers on Main Street in America, and that is what we want. That leads to better outcomes, faster economic growth, and more revenues for our States and for our society.

Mr. Speaker, I encourage a strong ``yes'' vote on the work by Congressmen Timmons and Foster, and I yield back the balance of my time of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in support of H.R. 4437, the Supervisory Modifications for Appropriate Risk-based Testing Act of 2025, sponsored by Representative Timmons and our Subcommittee on Financial Institutions Ranking Member (Mr. Foster). This is a good bipartisan bill that will support our community banks and our credit unions.

I have heard many community banks and credit unions raise concerns about their bank exams and ask how they might be streamlined. The bill provides these institutions with alternating full-scope and limited- scope opportunities.

In order to qualify for this relief, community banks and credit unions must be well capitalized and well managed. For example, that means that in order to receive this relief, they cannot be subject to an enforcement order.

The bill also clarifies that regulators retain the discretion to do additional exams if something unexpected develops related to safety and soundness and ensure that these institutions are complying with the law.

I also appreciate that Chairman Hill and the sponsors worked with me to include my amendment to require the regulators have examiners with significant experience before they conduct exams of smaller banks and credit unions.

My amendment would also minimize the number of examiners and time at the institution to carry out an onsite exam to reduce the burden on smaller institutions.

Finally, Congress must receive statistics from the regulators every year about these changes so we can understand how they are being implemented. If Members want to do something meaningful to help our community banks and credit unions, then I urge them to support this bill.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 4 minutes to the gentleman from Illinois (Mr. Foster).

Mr. Speaker, in closing, I yield myself the balance of my time.

Mr. Speaker, there is a lot that Congress can do to help our community financial institutions. This includes taking up deposit insurance reform bills like the ones that I and my committee Republicans have put forward. Increasing deposit insurance would help community banks and credit unions better compete for small businesses' deposits.

I appreciate that unlike some of the other bills Republicans have tried to advance this Congress, which were either handouts to our largest banks or rollbacks of vital consumer protections, H.R. 4437 focuses on helping our community banks and credit unions.

Mr. Speaker, I again urge my colleagues to support this bill, and I yield back the balance of my time.

Mr. Speaker, I rise in support of the bipartisan Supervisory Modifications for Appropriate Risk-based Testing Act, or SMART Act, which provides thoughtful examination relief to qualifying community banks and credit unions, while maintaining appropriate safeguards.

Specifically, the SMART Act allows community banks and credit unions with fewer than $6 billion in assets to qualify for alternating full- and limited-scope examinations, provided that their prudential regulator gave them a strong review at their last full-scope examination, that they are not subject to an enforcement action, and that they have not recently merged, which often can be a challenging time for recently merged institutions.

If they meet these criteria, qualifying banks and credit unions may also request that regulators combine certain types of exams so they can take place at the same time. Many employees of the smallest firms wear multiple hats and have daily duties outside of the examination process.

This provision allows firms with a strong track record to better coordinate with regulators and spend more time working with the communities that they serve. It will also provide regulatory staff with greater flexibility to focus their limited resources on poorly rated institutions that need greater oversight.

I reemphasize that this bill includes important safeguards that accompany this added flexibility.

As I have mentioned, the relief provided in this bill will only be available to well-managed and well-capitalized community banks and credit unions with fewer than $6 billion in assets that are in good standing with the regulatory agency, and the regulators will always be able to step in if there is a threat to the stability of a covered institution.

Finally, this legislation is a step toward the future of bank regulation which will rely, we hope, less on high-stakes, in-person examinations and more on automated electronically driven inspections that happen on a more continuous basis to deal with the challenges of the coming agentic world in finance.

Mr. Speaker, I am happy to co-lead this legislation, and I thank Mr. Timmons for his partnership on this bill. I encourage my colleagues to vote ``yes.''

Mr. Speaker, I rise in support of my bill, H.R. 4437, the Supervisory Modifications for Appropriate Risk-based Testing Act, also known as the SMART Act. I am proud to partner with Representative Foster on this bipartisan legislation to provide targeted, risk-based regulatory relief for well-managed and well-capitalized financial institutions with assets under $6 billion.

The SMART Act modernizes the examination process for qualifying institutions by allowing full scope onsite examinations every other cycle, alternating with more limited reviews focused on key risk areas. The bill also allows certain examinations, including safety and soundness, consumer compliance, and cybersecurity reviews to be conducted concurrently, reducing the burden of multiple overlapping examinations.

This is a practical, commonsense approach that improves regulatory efficiency while preserving strong oversight and consumer protections. The SMART Act is built on a principle familiar in other regulated industries, including the restaurant sector, where institutions with a strong track record and demonstrated compliance benefit from a more streamlined oversight process. This legislation applies that same principle to financial supervision by recognizing that not all institutions present the same level of risk, and our regulatory framework should reflect that reality.

At the same time, regulators would retain full authority to conduct additional examinations whenever necessary. Institutions with recent enforcement actions or major changes in control would not qualify for this streamlined process. Smaller financial institutions are essential to local economies, helping finance small businesses, first homes, and community development projects across the country. This bill gives them greater capacity to serve their customers and communities while maintaining the strong safeguards that consumers expect and deserve.

Mr. Speaker, I urge my colleagues on both sides of the aisle to support this bipartisan legislation that promotes efficiency and smarter regulation.