Timmons Bill to Rollback Regulatory Burdens and Help Small Businesses, Families Passes U.S. House

Today, the U.S. House of Representatives unanimously passed the Supervisory Modifications for Appropriate Risk-based Testing Act (SMART Act), legislation introduced by Congressman William Timmons (SC-04) to modernize the examination process for well-managed and well-capitalized community banks and credit unions.

"Community banks and credit unions are the backbone of many local economies, especially in places like the Upstate," said Congressman Timmons. "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."

Community banks and credit unions play a vital role in local economies by supporting small businesses, helping families access credit, and driving economic growth in communities across South Carolina and the country. However, many smaller financial institutions face duplicative and time-consuming examination requirements that place unnecessary strain on their operations despite strong performance and compliance records.

The SMART Act creates a more practical, risk-based approach to supervision for qualifying institutions with $6 billion or less in assets. Under Rep. Timmons' bill, qualifying institutions would alternate between full-scope and limited-scope examinations, allowing regulators to focus reviews on key risk areas while reducing unnecessary administrative burden.

The legislation also allows institutions, upon request, to combine certain examinations, including safety and soundness, consumer compliance, and cybersecurity reviews, into a single examination cycle. In addition, the bill directs regulators to adopt examination best practices aimed at improving efficiency and transparency while preserving regulators' full 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.

"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 continued.

The SMART Act now heads to the Senate for consideration.