Lawmakers Push Bill to Let Banks Experiment with AI

The House Financial Services Committee has put forward a bipartisan bill to enable banks to trial AI, aiming to boost its uptake across the financial services sector.

The “Unleashing AI Innovation in Financial Services Act” would establish AI innovation labs, which would allow banks and other financial firms to test AI tools without the risk of immediate regulatory enforcement.

Lawmakers say the proposal is designed to give firms space to develop new technologies while maintaining key consumer protections.

Chairman French Hill said: “As AI continues to evolve, we must understand its full impact because it will touch every part of our lives,”

“The Unleashing AI Innovation in Financial Services Act ensures that federal financial agencies allow the companies they oversee to experiment with AI through regulatory sandboxes.”

To participate in the trial, banks must apply for an AI test project, where they specify which regulations they want waived or adjusted. They must also propose an alternative method to meet the intent of those rules and explain the rationale behind the request.

If approved, the bank could run its test for a set period under strict conditions. Other financial regulators would be barred from enforcing their own rules against the bank unless they were specifically named in the application.

The bill includes several safeguards, such as enabling regulators to halt a project if it poses a risk to consumers, investors, or financial markets. This could include threats to Federal Deposit Insurance funds, breaches of anti-money laundering or counter-terrorism financing laws or risks to US national security.

Representative Josh Gottheimer added: “When it comes to artificial intelligence, we need smart safeguards in place to protect consumers, prevent abuse, and ensure our families and financial systems are safe. We also must ensure that the United States continues to lead the world in innovation.”