May 13, 2026
Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs
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 examinationmeans 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 capitalizedhas the meaning given that term in section 38(b).(iii) Well managed
With respect to an insured depository institution, the term
well managedmeans 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 examinationmeans 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 capitalizedhas the meaning given that term in section 216(c).(C) Well managed
With respect to an insured credit union, the term
well managedmeans 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.