Unleashing AI Innovation in Financial Services Act
Sponsored By: Representative Hill, J. French [R-AR-2]
In Committee
Summary
Would create AI Innovation Labs at financial regulators to let banks, brokers, credit unions, and other regulated firms run limited live tests of AI-powered financial products under approved alternative compliance plans. The bill sets who can apply, what must be in applications, review deadlines, data security rules, and reporting to Congress.
Show full summary
- Regulated firms can apply to test AI-driven services and propose specific regulations to be waived or modified, plus limits on size and a proposed end date. Agencies must decide within 120 days and may extend by 120 days, with approvals based on a greater-than-50-percent likelihood of meeting standards.
- Consumers and investors would see pilots aimed at improving access, efficiency, and protections, while agencies keep authority to enforce fraud rules and can enjoin projects that pose immediate danger or systemic risks, including threats to deposit insurance, anti-money-laundering obligations, or national security.
- Financial regulators must adopt implementing rules within 180 days with a 60-day public comment period, protect confidential data, and report aggregated findings to Congress starting 2 years after enactment and annually for 7 years.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 3 benefits, 0 costs, 1 mixed.
Power to Stop Dangerous AI Tests
This bill would let a financial regulator file a federal lawsuit to enjoin an AI test project if it finds the project poses an immediate danger to consumers or investors. The authority would also cover risks to markets, deposit or share insurance funds, anti‑money‑laundering obligations, or national security. The bill would not limit an agency's power to enforce fraud or unsafe‑or‑unsound practices related to a test project.
Fast Application Path for AI Tests
This bill would create a required agency form and time‑bound review for AI test projects. Applications would have to describe the AI use, an alternative compliance plan naming any rule to be waived or modified, a termination date, size limits, a business plan, and an estimated economic impact. The agency must decide within 120 days and may extend 120 more days; if no decision follows the extension, the application would be deemed approved. The agency would have to approve if the applicant shows it is more likely than not to meet the standards. Approval notices would list the regulation at issue, alternate terms, end date, size limits, and conditions. While approved, the agency could enforce that regulation only as set out in the approval, and other agencies could not enforce it except where the approval allows. Agencies would have to keep sponsor data secure. Denials must be written, trigger a 30‑day delay on related enforcement, and applicants could resubmit but not more than twice with substantially similar proposals. Joint and cross‑agency applications would be allowed, and an applicant supervised by multiple agencies would have to notify each agency within 5 business days of filing.
New AI Innovation Labs for Regulators
This bill would require each federal financial regulator to set up or name an AI Innovation Lab when the law is enacted. Regulated firms — like banks, broker-dealers, investment advisers, clearing agencies, credit unions, and Federal Home Loan Banks — would be able to run approved AI test projects in those labs. Labs would operate under the bill's application and approval process.
Agency Rule Deadlines and Project Limits
This bill would require each financial regulator to issue implementing rules within 180 days after enactment and publish them with 60 days for public comment. The rules would have to explain how to modify approved AI test projects and the consequences for failing to meet approval terms. The rules would also require that an AI test project could not end earlier than one year after approval.
Sponsors & CoSponsors
Sponsor
Hill, J. French [R-AR-2]
AR • R
Cosponsors
Rep. Torres, Ritchie [D-NY-15]
NY • D
Sponsored 7/29/2025
Rep. Steil, Bryan [R-WI-1]
WI • R
Sponsored 7/29/2025
Rep. Gottheimer, Josh [D-NJ-5]
NJ • D
Sponsored 7/29/2025
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov