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119-hr-4801119th CongressWALLET

Unleashing AI Innovation in Financial Services Act

Sponsored By: Representative Hill, J. French [R-AR-2]

In Committee

Summary

Creates AI Innovation Labs at financial regulators to let regulated firms run supervised AI pilot projects under alternative compliance plans that limit enforcement while testing new AI tools. The bill would set rules for applications, approvals, data security, disclosures, and interagency coordination.

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  • Regulated firms would be able to apply to test AI one year after enactment and must submit a detailed plan, risk checks, a termination date, size limits, and a business plan. Agencies would have 120 days to decide, and an application may be deemed approved if an agency misses its deadline.
  • Financial regulators would have to establish or designate AI Innovation Labs and write implementing rules within 180 days, with a 60-day public comment period. Agencies must coordinate, share best practices, and can jointly approve multi-agency pilots.
  • Consumers and markets would get new disclosure and reporting rules for direct interactions with AI pilots, plus oversight: agencies must report outcomes starting 2 years after enactment and annually for 7 years, and may seek injunctive relief for immediate risks.

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Bill Overview

Analyzed Economic Effects

5 provisions identified: 0 benefits, 0 costs, 5 mixed.

Agency review and enforcement rules

If enacted, the appropriate agency would have 120 days to decide on a complete application and could extend once by 120 days. An application would be approved if it is more likely than not to meet the statutory standards. Approvals would list the rule covered, terms of the alternative plan, an end date, and size limits. If denied, the agency must give written reasons and generally wait 30 days before enforcement. Applicants could amend and resubmit but not more than two similar denied applications. Agencies could seek court injunctions or issue administrative cease orders for projects that pose immediate danger, market risk, deposit/share insurance risk, AML/CFT violations, or national security risks.

Detailed AI Test Application Rules

If enacted, applications to run an AI test project would need a detailed description of the AI, its purposes, and capabilities. Applicants would have to propose an alternative compliance strategy, justify the change, and provide risk management plans including cybersecurity. Applications would also need a public-interest and risk assessment, AML/CFT attestation, a proposed termination date and size limits, a business plan, impact estimates, and records policies consistent with law.

Multi-agency notice and approval

If enacted, a regulated entity would have to notify each agency that issues or enforces an implicated regulation within 5 business days of applying. Any agency notified could intervene within 30 days. If an agency intervenes, the AI test project would need joint approval from the appropriate agency and each intervening agency before it could take effect. Two or more regulated entities could file a joint application with an agency.

New AI Innovation Labs for Regulators

If enacted, each federal financial regulator would establish or designate an AI Innovation Lab upon enactment. These labs would accept applications from regulated firms like banks, broker‑dealers, investment companies, and credit unions to run AI test projects. Participation would require an approved application and follow agency-specific lab rules. Labs would aim to encourage AI innovation while protecting consumers, deposit insurance funds, and financial stability.

Applications start one year later

If enacted, regulated firms would be able to submit applications to the appropriate financial regulatory agency beginning one year after the date of enactment. Applications would use forms determined by the agency. This gives agencies time to write rules but delays when projects can begin testing.

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.

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