The U.S. House unanimously approved legislation from Rep. William Timmons that would create a risk-based examination process for smaller community banks and credit unions, sending the bill to the Senate.
Based on a release from U.S. Rep. William Timmons (SC-04).
WASHINGTON — The U.S. House of Representatives on May 12, 2026, unanimously passed the Supervisory Modifications for Appropriate Risk-based Testing Act, legislation introduced by Rep. William Timmons, R-S.C., according to Timmons’ office.
The SMART Act would modernize the examination process for well-managed and well-capitalized community banks and credit unions, according to Timmons’ office.
“Community banks and credit unions are the backbone of many local economies, especially in places like the Upstate,” Timmons said. “These institutions should be focused on serving families, supporting small businesses, and expanding opportunity in their communities, not navigating unnecessary red tape from Washington. The SMART Act takes a commonsense, risk-based approach to supervision that reduces regulatory burden while maintaining strong oversight and accountability.”
The bill would create a risk-based supervision approach for qualifying institutions with $6 billion or less in assets, according to Timmons’ office. Under the legislation, those institutions would alternate between full-scope and limited-scope examinations, allowing regulators to focus on key risk areas while reducing administrative burden.
The bill also would allow institutions, upon request, to combine certain examinations — including safety and soundness, consumer compliance, and cybersecurity reviews — into a single examination cycle, according to Timmons’ office. It directs regulators to adopt examination best practices aimed at improving efficiency and transparency while preserving regulators’ authority to conduct additional reviews when warranted.
Institutions subject to formal enforcement actions or recent changes in control would not qualify for the modified examination process, according to Timmons’ office.
“By streamlining the examination process for well-managed institutions, this bill allows local lenders from Greenville to Spartanburg to spend more time helping South Carolinians grow businesses, buy homes, and build stronger financial futures,” Timmons said.
The bill now heads to the Senate for consideration, according to Timmons’ office.
