SMART Act of 2025
Click any stage to learn more about the legislative process.
Would reduce the examination burden on small, well-run banks and credit unions by requiring a lighter-touch 'limited-scope' review after every full examination and allowing institutions to request that multiple separate exams be conducted simultaneously.
The bill would also set new conduct standards for on-site examiners — such as minimizing disruption and giving advance notice — and require federal banking regulators to report annual exam-practice data to Congress.
What this bill would do
What it would do
The bill would amend the Federal Deposit Insurance Act and the Federal Credit Union Act to give examination relief to well-capitalized and well-managed depository institutions and credit unions with $6 billion or less in total assets. After a full-scope, on-site examination, the next scheduled examination of a qualifying institution would be a limited-scope examination, as determined by the appropriate federal regulator. In addition, if a qualifying institution is subject to separate safety-and-soundness, consumer compliance, and information technology or cybersecurity examinations, it could request that two or three of those exams be combined and conducted at the same time. Exceptions apply to institutions under formal enforcement proceedings or orders and, for banks, to recently acquired institutions.
The bill would also direct examiners conducting on-site reviews of institutions under $6 billion in assets to use experienced examiners, minimize examiner count and time on-site, schedule at a convenient time, and provide advance notice of exam topics. Federal banking agencies and the National Credit Union Administration would be required to include exam-practice data — including average examiner experience, examiner count, and visit duration — in their annual reports to Congress. Regulators would retain full authority to conduct off-site monitoring or additional full-scope exams whenever safety and soundness concerns warrant it.
Key provisions
- 1Would require that the examination following a full-scope review for qualifying institutions be a limited-scope examination, as determined by the appropriate federal regulator.
- 2Would allow qualifying institutions to request that two or three separate exam types — safety and soundness, consumer compliance, and IT/cybersecurity — be combined and conducted simultaneously.
- 3Would exempt institutions under formal enforcement proceedings or orders, and recently acquired banks, from the examination relief provisions.
- 4Would direct on-site examiners to use experienced personnel, minimize examiner count and time on-site, schedule at a convenient time, and give advance notice of exam topics to institutions under $6 billion in assets.
- 5Would require federal banking agencies and the NCUA to include annual exam-practice data — average examiner experience, examiner count, and visit duration — in their reports to Congress.
- 6Would preserve regulators' full authority to conduct additional full-scope exams, targeted reviews, or off-site monitoring whenever safety and soundness concerns arise.
Who would be affected
Insured depository institutions (community banks and similar institutions) and insured credit unions with $6 billion or less in total assets that are currently rated well-capitalized and well-managed. Federal banking regulators — including the agencies that constitute the "appropriate Federal banking agency" under the FDIC Act — and the National Credit Union Administration, which would be required to issue implementing rules and revise reporting practices.
Why it matters
For smaller community banks and credit unions that already have clean regulatory records, the bill would meaningfully reduce the time and resources consumed by recurring federal examinations. Institutions could face less frequent full-scope reviews and could consolidate separate exam visits into one. The advance-notice and examiner-experience requirements would give institutions more predictability and a better-staffed examination counterpart.
What would change
Changes to existing law
Amends Federal Deposit Insurance Act, Section 10(d) (12 U.S.C. 1820(d)) (Sec. 2(a), Sec. 3(a))
Adds alternating limited-scope exam requirements, combined-exam option, examiner conduct standards, and annual congressional reporting requirements for institutions with $6 billion or less in assets.
Amends Federal Credit Union Act, Section 204 (12 U.S.C. 1784) (Sec. 2(b), Sec. 3(b))
Adds parallel alternating limited-scope exam requirements, combined-exam option, examiner conduct standards, and annual congressional reporting requirements for credit unions with $6 billion or less in assets.
Agencies directed to act
Effective dates
- Federal banking agencies must issue implementing rules for examination relief provisions
- National Credit Union Administration must issue implementing rules for examination relief provisions
How implementation would work
Federal banking agencies and the National Credit Union Administration would each have 12 months after enactment to issue rules implementing the limited-scope and combined-examination requirements, including procedures for addressing institutions that experience material changes in financial condition between exams or that have violated applicable laws. Each agency's annual congressional report would have to include aggregate data on examiner experience, examiner counts, and on-site visit duration. Regulators retain discretionary authority to escalate to full-scope or additional reviews whenever warranted — the relief provisions do not constrain that discretion.
Legislative status & sources
Latest action
Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Official CRS summary
Show the CRS summaryHide the CRS summary
This bill limits the scope of certain examinations and combines oversight procedures for certain small depository institutions and credit unions.
Specifically, depository institutions and credit unions that are considered well-capitalized and well-managed (per their most recent examination) with assets of $6 billion or less must receive a limited-scope examination, as determined by the appropriate federal regulator, in the year following a full-scope examination. In addition, upon request by the depository institution or credit union, the regulator must combine separate compliance examinations (e.g., safety and soundness examinations and information technology examinations) and perform them at the same time.
The bill provides exceptions for recently acquired depository institutions and for depository institutions and credit unions subject to certain formal enforcement proceedings or orders.
Legislative subjects
Bank accounts, deposits, capital; Banking and financial institutions regulation; Business records; Congressional oversight; Corporate finance and management; Finance and Financial Sector; Government studies and investigations
Committee report
H. Rept. 119-249