South Carolina, October 5, 2025
News Summary
U.S. Representative William Timmons has proposed the SMART Act, aimed at reducing regulatory burdens on community banks in South Carolina. This legislation seeks to ease the operational costs tied to regulations that have negatively impacted these financial institutions. With the number of community banks declining dramatically, the SMART Act emphasizes the need for legislative reform to support local banking and enhance economic opportunities in communities. Key provisions include adjusted examination frequencies and streamlined regulatory processes, allowing community banks to be more efficient in serving their local economies.
Washington, D.C.
U.S. Rep. William Timmons has introduced the SMART Act (Supervisory Modifications for Appropriate Risk-based Testing) of 2025, aiming to ease regulatory burdens on community banks. This initiative focuses on reducing excessive costs associated with regulations that have hindered operations for these financial institutions, which are crucial for local economies in South Carolina’s 4th Congressional District and beyond.
As a member of the House Committee on Financial Services and a former member of the South Carolina Senate, Timmons expressed concern that community banks face obstacles that make it difficult for them to operate effectively. The push for the SMART Act comes in light of the fact that over the past two decades, the number of community banks nationwide has plummeted by 46%, falling from 7,620 in 2003 to just 4,129 in 2023. The burden of regulations enacted by the Dodd-Frank Act has been cited as a major factor contributing to this decline, with many regulations disproportionately impacting community banks and leading to fewer loans and increased costs for local borrowers.
The SMART Act has successfully passed through the Financial Services Committee and is now set for a vote in the House of Representatives. One of the key provisions of the legislation allows qualifying financial institutions to undergo full-scope on-site examinations every other cycle, rather than annually. This change aims to reduce the administrative burden on community banks, allowing them to redirect their resources toward serving their customers and fostering economic growth.
Additionally, the SMART Act permits regulators to receive concurrent exam requests. This measure is designed to streamline oversight and alleviate the interference caused by overlapping regulatory visits. Despite easing some of the regulatory requirements, the legislation still mandates that regulators establish rules within a 12-month timeframe for institutions under supervision, ensuring that oversight is not entirely abandoned.
The Financial Services Committee has emphasized the importance of prioritizing strong performance among well-managed institutions while implementing streamlined oversight mechanisms through initiatives like the SMART Act. Republican committee members have voiced their commitment to creating a regulatory environment conducive to the growth of community banks, encapsulated in their agenda titled “Making Community Banking Great Again.”
By providing regulatory relief, the SMART Act hopes to empower banks across South Carolina, from Greenville to Spartanburg, to concentrate on boosting economic growth and supporting local communities. Timmons has underscored the significant role that local financial institutions play in driving community development and enhancing opportunities in both urban and rural settings.
Background and Implications
The introduction of the SMART Act occurs against a backdrop of considerable regulatory pressures that have been identified as detrimental to community banks. The Dodd-Frank Act, which was implemented following the financial crisis of 2008, aimed to increase oversight but inadvertently imposed a heavy burden on smaller banking institutions. With fewer community banks available, local economies risk experiencing diminished access to credit and lending options that are vital for business and personal financial health.
The SMART Act represents an opportunity for legislative reform that could potentially reverse trends in community bank closures and foster an environment where local banks can thrive. As the bill progresses to the House floor for a vote, the implications of its passage could be significant for the future of community banking in South Carolina and across the nation.
FAQ
What is the SMART Act?
The SMART Act (Supervisory Modifications for Appropriate Risk-based Testing) of 2025 aims to reduce regulatory burdens on well-managed financial institutions.
Who introduced the SMART Act?
U.S. Rep. William Timmons introduced the SMART Act to alleviate excessive regulatory costs that hinder community banks’ operations.
How many community banks have been lost over the past two decades?
Over the past two decades, the number of community banks has decreased by 46%, from 7,620 in 2003 to 4,129 in 2023.
What is the primary objective of the SMART Act?
The primary objective of the SMART Act is to ease regulatory burdens on community banks and thus reduce costs, allowing them to operate more efficiently.
What will change for community banks under the SMART Act?
Under the SMART Act, qualifying institutions would only undergo full-scope on-site exams every other cycle, and regulatory agencies must issue rules within 12 months.
Key Features of the SMART Act
| Feature | Description |
|---|---|
| Reduced Exam Frequency | Qualifying institutions will only undergo full-scope on-site exams every other cycle. |
| Concurrent Exam Requests | Allows for regulators to request overlapping exams, reducing administrative burdens. |
| Regulatory Rule Timeline | Regulators must issue rules within 12 months to streamline oversight. |
| Impact on Community Banks | Aims to alleviate costs and improve operational efficiency for community banks. |
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Additional Resources
- Post and Courier: SMART Act and Community Banks
- Upstate Business Journal: United Community Celebrates 75 Years
- Greenville Business Magazine: Merger Completion Announcement
- Globe Newswire: United Community Banks Q3 Earnings Release
- Wikipedia: Community Bank
Author: STAFF HERE GREENVILLE
The HERE Greenville Staff Writers are a collaborative team of journalists, editors, and local contributors passionate about delivering accurate, timely information to the Greenville community. As part of the HEREcity.com Network, which powers over 100 U.S. city sites including HEREcolumbia.com, our staff draws on collective experience in South Carolina journalism to cover everything from business sales and real estate developments to dining deals and community initiatives. Our Expertise and Background Local Roots in Greenville Our team includes lifelong Greenville residents and SC natives with deep knowledge of the area’s history, economy, and culture. We’ve covered key events like the recent sales in the Heritage Historic District 17 , Greenville’s textile and railroad heritage 2 , and growth in local education sectors (e.g., Greenville Technical College programs) 27 . Collective Experience With over 50 combined years in journalism, our staff has backgrounds in print, digital media, and community reporting. We prioritize fact-based stories, drawing from sources like the Greenville Chamber of Commerce, city government records, and on-the-ground interviews. Commitment to Quality Every article is a group effort, involving research, editing, and verification to ensure reliability. We adhere to journalistic standards, citing credible sources and updating content as new details emerge.
