,,ib ,union ,calendar ,no4 #bjf #aaith ,,congress #ast ,session ,h4 ,r4 #ddcg ,report ,no4 #aai-bdi ,,in ,,the ,,house ,,of ,,representatives ,july #af1 #bjbe,mr4 ,timmons 7for himself and ,mr4 ,foster7 introduced the following bill2 which was referred to the ,committee on ,financial ,services ,september #h1 #bjbe,reported with an amendment1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed,strike out all after the enacting clause and insert the part printed in italic,for text of introduced bill1 see copy of bill as introduced on ,july #af1 #bjbe ,a ,,bill ,to reduce the regulatory burden on certain well managed and well capitalized financial institutions1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,supervisory ,modifications for ,appropriate ,risk-based ,testing ,act of #bjbe or the ,,smart ,act of #bjbe4 #b4 ,examination relief for certain well managed and well capitalized financial institutions 7a7 ,insured depository institutions ,section #aj7;d7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahbj7;d77 is amended by adding at the end the following3 7#aa7 ,examination relief for certain well managed and well capitalized insured depository institutions 7,a7 ,in general ,the following shall apply to a well managed and well capitalized insured depository institution with #f1jjj1jjj1jjj or less in consolidated assets3 7i7 ,alternating limited-scope examinations ,after an insured depository institution receives a full-scope1 on-site examination from the appropriate ,federal banking agency1 the next examination of the insured depository institution by the appropriate ,federal banking agency shall be a limited-scope examination1 as determined by the appropriate ,federal banking agency4 7ii7 ,combined examinations ,if an insured depository institution is otherwise subject to separate safety and soundness examinations1 consumer compliance examinations1 and information technology and cybersecurity examinations1 the appropriate ,federal banking agency shall1 upon request of the insured depository institution1 combine two or three such examinations1 as specified by the insured depository institution1 and carry them out at the same time4 7,b7 ,exception ,subparagraph 7,a7 shall not apply to an insured depository institution if-- 7i7 the insured depository institution is currently subject to a formal enforcement proceeding or order by the ,corporation or the appropriate ,federal banking agency2 or 7ii7 a person acquired control of the insured depository institution since the most recent full-scope1 on-site examination of the insured depository institution from the appropriate ,federal banking agency4 7,c7 ,rulemaking ,not later than #ab months after the date of enactment of this paragraph1 the ,federal banking agencies shall issue rules to carry out subparagraph 7,a71 including1 with respect to an insured depository institution described under subparagraph 7,a71 to-- 7i7 establish procedures for the limited-scope examinations described in subparagraph 7,a77i72 7ii7 establish procedures for reviewing insured depository institutions that-- 7,i7 experience material changes in financial condition or operational risk profile between scheduled examinations2 or 7,,ii7 have failed to comply with ,federal or ,state banking laws and regulations2 and 7iii7 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 regulations4 7,d7 ,rule of construction ,nothing in this paragraph may be construed to limit the authority of a ,federal banking agency to conduct off-site monitoring1 targeted reviews1 or additional full-scope1 on-site examinations of an insured depository institution if the ,federal banking agency determines such monitoring1 reviews1 or examinations are necessary to ensure safety and soundness or compliance with applicable laws4 7,e7 ,definitions ,in this paragraph3 7i7 ,consumer compliance examination ,the term consumer compliance examination means an examination to assess compliance with the requirements of ,federal consumer financial law 7as such term is defined in section #ajjb of the ,consumer ,financial ,protection ,act of #bjaj74 7ii7 ,well capitalized ,the term well capitalized has the meaning given that term in section #ch7;b74 7iii7 ,well managed ,with respect to an insured depository institution1 the term well managed means that1 when the institution was most recently examined by the appropriate ,federal banking agency1 the institution was found to be well managed1 and the institution's composite condition was found to be satisfactory or outstanding4 4 7b7 ,insured credit unions ,section #bjd of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #aghd7 is amended by adding at the end the following3 7h7 ,examination relief for certain well managed and well capitalized insured credit unions 7#a7 ,in general ,the following shall apply to a well managed and well capitalized insured credit union with #f1jjj1jjj1jjj or less in consolidated assets3 7,a7 ,alternating limited-scope examinations ,after an insured credit union receives a full-scope1 on-site examination from the ,national ,credit ,union ,administration1 the next examination of the insured credit union by the ,national ,credit ,union ,administration shall be a limited-scope examination1 as determined by the ,national ,credit ,union ,administration4 7,b7 ,combined examinations ,if an insured credit union is otherwise subject to separate safety and soundness examinations1 consumer compliance examinations1 and information technology and cybersecurity examinations1 the ,national ,credit ,union ,administration shall1 upon request of the insured credit union1 combine two or three such examinations1 as specified by the insured credit union1 and carry them out at the same time4 7#b7 ,exception ,paragraph 7#a7 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 ,administration4 7#c7 ,rulemaking ,not later than #ab months after the date of enactment of this subsection1 the ,national ,credit ,union ,administration shall issue rules to carry out paragraph 7#a71 including1 with respect to an insured credit union described under paragraph 7#a71 to-- 7,a7 establish procedures for the limited-scope examinations described in paragraph 7#a77;,a72 7,b7 establish procedures for reviewing insured credit unions that-- 7i7 experience material changes in financial condition or operational risk profile between scheduled examinations2 or 7ii7 have failed to comply with ,federal or ,state banking laws and regulations2 and 7,c7 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 regulations4 7#d7 ,rule of construction ,nothing in this subsection may be construed to limit the authority of the ,national ,credit ,union ,administration to conduct off-site monitoring1 targeted reviews1 or additional full-scope1 on-site examinations of an insured credit union if the ,national ,credit ,union ,administration determines such monitoring1 reviews1 or examinations are necessary to ensure safety and soundness or compliance with applicable laws4 7#e7 ,definitions ,in this paragraph3 7,a7 ,consumer compliance examination ,the term consumer compliance examination means an examination to assess compliance with the requirements of ,federal consumer financial law 7as such term is defined in section #ajjb of the ,consumer ,financial ,protection ,act of #bjaj74 7,b7 ,well capitalized ,the term well capitalized has the meaning given that term in section #baf7;c74 7,c7 ,well managed ,with respect to an insured credit union1 the term well managed means that1 when the credit union was most recently examined by the ,national ,credit ,union ,administration1 the credit union was found to be well managed1 and the credit union's composite condition was found to be satisfactory or outstanding4 4 #c4 ,examination practices 7a7 ,insured depository institutions ,section #aj7;d7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahbj7;d771 as amended by section #b7;a71 is further amended by adding at the end the following3 7#ab7 ,examination practices ,with respect to on-site examination of an insured depository institution with less than #f1jjj1jjj1jjj in total assets1 the appropriate ,federal banking agency shall-- 7,a7 ensure the examination is led by1 to the maximum extent practicable1 an examiner with significant experience as an examiner2 7,b7 make every effort1 to the maximum extent practicable1 to minimize the number of examiners utilized and the amount of time spent at the institution to carry out the examination2 7,c7 make every effort1 to the maximum extent practicable1 to schedule the examination at a time that is convenient for the institution2 and 7,d7 to the maximum extent practicable1 give the institution advance notice of issues expected to be covered in the examination4 7#ac7 ,report ,in its annual report to ,congress1 each ,federal banking agency shall include-- 7,a7 information on how the agency is complying with paragraphs 7#aa7 and 7#ab72 and 7,b7 aggregate data summarizing the agency's examination practices with respect to insured depository institutions with less than #f1jjj1jjj1jjj in total assets1 including-- 7i7 the average experience of examiners1 including the average number of years of examiner experience of those who lead on-site examinations2 7ii7 the average number of examiners utilized2 and 7iii7 the average amount of time the agency spends visiting such institutions for on-site examinations4 4 7b7 ,insured credit unions ,section #bjd of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #aghd71 as amended by section #b7;b71 is further amended by adding at the end the following3 7i7 ,examination practices ,with respect to on-site examination of an insured credit union with less than #f1jjj1jjj1jjj in total assets1 the ,national ,credit ,union ,administration shall-- 7#a7 ensure the examination is led by1 to the maximum extent practicable1 an examiner with significant experience as an examiner2 7#b7 make every effort1 to the maximum extent practicable1 to minimize the number of examiners utilized and the amount of time spent at the credit union to carry out the examination2 7#c7 make every effort1 to the maximum extent practicable1 to schedule the examination at a time that is convenient for the credit union2 and 7#d7 to the maximum extent practicable1 give the credit union advance notice of issues expected to be covered in the examination4 7j7 ,report ,in its annual report to ,congress1 the ,national ,credit ,union ,administration shall include-- 7#a7 information on how the ,administration is complying with subsections 7h7 and 7i72 and 7#b7 aggregate data summarizing the ,administration's examination practices with respect to insured credit unions with less than #f1jjj1jjj1jjj in total assets1 including-- 7,a7 the average experience of examiners1 including the average number of years of examiner experience of those who lead on-site examinations2 7,b7 the average number of examiners utilized2 and 7,c7 the average amount of time the ,administration spends visiting such credit unions for on-site examinations4 4 ,september #h1 #bjbe,reported with an amendment1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed