FAIRR Act
Sponsored By: Senator Warner, Mark R. [D-VA]
Introduced
Summary
A cross-agency AI risk framework for finance. This bill would create the Financial Artificial Intelligence Risk Reduction Act to coordinate regulators, study how financial firms and service providers use AI, and set reporting, testing, and rulemaking paths to cut AI-driven threats to market stability.
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- Financial institutions and market participants would face a new Office of Financial Research study and a Financial Stability Oversight Council report that must identify AI threats such as market manipulation and risks from autonomous agents. The Council must issue that report within 180 days and will consult with firms and service providers.
- Regulators would gain a formal coordination role and a process to close gaps in oversight. Member agencies would be expected to implement the Council's recommendations under existing procedures, committees get 30 days to comment, and the Congressional Review Act applies to related rules.
- Third-party AI providers and credit unions would see stronger oversight through changes to the Federal Credit Union Act that expand board authority over outside AI services. The bill also requires scenario-based exercises with the private sector to test and improve defenses against AI-driven disruptions.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 0 benefits, 0 costs, 3 mixed.
New cross-agency AI risk plan
If enacted, the Financial Stability Oversight Council would have 180 days to report on AI threats to financial stability. The council could ask the Office of Financial Research to study how firms use AI. Relevant Congressional committees would have 30 days to comment after getting the report. The bill would make agency rules tied to this work subject to the Congressional Review Act and would require scenario exercises run with private firms to test AI-driven market disruptions.
New SEC AI rules and liability
If enacted, the Securities and Exchange Commission would have 180 days to issue rules requiring covered market participants to govern AI. The rules would apply to issuers, brokers, dealers, security-based swap dealers, and self-regulatory organizations. The commission would require testing, monitoring, human oversight, permissions, escalation steps, and limits on AI use. The bill would also make clear that using AI does not let firms break or avoid securities laws.
Stronger oversight of financial vendors
If enacted, the Federal Housing Finance Agency director could examine services done for regulated housing finance entities as if the entity did them itself. Regulated entities or the Office of Finance would have to tell the director within 30 days after signing a service contract or after the service starts. The bill would also let the NCUA Board set how it carries out certain third-party oversight actions and would remove an existing subsection from the credit union statute.
Sponsors & CoSponsors
Sponsor
Warner, Mark R. [D-VA]
VA • D
Cosponsors
Sen. Kennedy, John [R-LA]
LA • R
Sponsored 8/6/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov