SMART Act of 2025

The SMART Act of 2025 would reduce regulatory oversight requirements for certain well-managed and well-capitalized financial institutions. Specifically, the bill would apply to banks and credit unions with consolidated assets of $6 billion or less that have demonstrated sound management practices and adequate capital levels. These qualifying institutions would alternate between full-scope examinations and limited-scope examinations, meaning they would undergo comprehensive on-site reviews only every other examination cycle, with off-year reviews focused on key risk areas. The bill also allows eligible institutions to combine certain safety-and-soundness exams with consumer compliance exams to further streamline the examination process.

Proponents argue the bill would allow well-performing financial institutions to devote more resources to serving customers and communities rather than managing regulatory compliance. The bill has passed the House Financial Services Committee and is eligible for a floor vote. Federal banking agencies and the National Credit Union Administration would have 12 months after enactment to establish new procedures and guidelines to implement the bill's provisions while maintaining appropriate oversight for safety and compliance. The bill includes exceptions that would allow regulators to conduct additional examinations if an institution experiences material changes in financial condition or operational risk.