Sponsors (5)
The bill brings clearer federal oversight and structured pilot testing for AI in finance to promote safer innovation and consumer protection, but it increases compliance burdens, risks temporary weakening of protections in pilots, and may create regulatory complexity and reduced transparency.
Consumers (including small-business owners) will see more AI-driven financial products explicitly subject to federal consumer finance and securities oversight, increasing regulatory protections for customers.
Financial institutions and their customers will benefit from agency-supervised AI pilot programs that let firms test products under regulatory oversight while requiring data security and confidentiality, accelerating safer innovation and potentially better financial products and services.
Regulated financial firms will have clearer statutory rules and a defined legal basis for agency oversight of AI, reducing regulatory uncertainty and helping firms plan compliance.
Consumers (including taxpayers and small-business owners) could be exposed to harm because approved pilots may temporarily relax consumer protections and automatic time-limited approvals risk insufficient agency review of complex AI projects.
Businesses that use AI in financial products will likely face higher compliance costs and slower product rollouts because broader regulatory coverage increases reporting and oversight obligations.
Regulatory fragmentation—overlapping jurisdiction among multiple agencies plus reliance on agency discretion—could create duplication, compliance complexity, and uneven enforcement across firms.
Based on analysis of 3 sections of legislative text.
Directs major federal financial regulators to create AI Innovation Labs to allow supervised AI test projects under agency-approved alternative compliance strategies, with timelines and reporting.
Introduced July 29, 2025 by Marion Michael Rounds · Last progress July 29, 2025
Creates a required federal framework for testing artificial intelligence in financial services by directing each major federal financial regulator to set up an "AI Innovation Lab" or designate an office to permit regulated firms to run supervised AI test projects under agency-approved alternative compliance strategies. The law sets application standards and timelines, grants limited protections for approved test projects, preserves enforcement for fraud or unsafe practices, requires agencies to adopt implementing rules and interagency coordination, and mandates regular aggregated reporting to Congress.