What does Preamble of Unleashing AI Innovation in Financial Services Act do?

This bill, formally titled 'To establish AI Innovation Labs that permit certain persons to experiment with artificial intelligence without expectation of enforcement actions,' aims to establish AI Innovation Labs. The purpose of these labs is to allow certain individuals to experiment with artificial intelligence. Experimentation within these labs would occur without the expectation of enforcement actions.

What does SHORT TITLE. of Unleashing AI Innovation in Financial Services Act do?

This bill is formally titled Unleashing AI Innovation in Financial Services Act

What does DEFINITIONS. of Unleashing AI Innovation in Financial Services Act do?

This section defines key terms used throughout the legislation. An 'AI test project' is defined as a financial product, service, or activity under the jurisdiction of a financial regulatory agency that uses artificial intelligence and may be subject to federal regulation. The 'appropriate financial regulatory agency' is determined based on the type of institution, referencing specific sections of the Federal Deposit Insurance Act and the Securities Exchange Act. ’Artificial intelligence’ and ‘AI’ are defined by reference to section 5002 of the National Artificial Intelligence Initiative Act of 2020. ’Financial product, service, or activity’ includes a broad range of financial offerings and internal activities, excluding the business of insurance. ’Regulated entity’ refers to an entity regulated or insured by a financial regulatory agency.

What does AI INNOVATION LABS. of Unleashing AI Innovation in Financial Services Act do?

Financial regulatory agencies must establish or identify an 'AI Innovation Lab'. These labs will allow regulated entities to experiment with AI test projects. The labs aim to avoid unnecessary or unduly burdensome regulation and enforcement actions. The purpose is to encourage the use of AI to improve regulatory compliance. Experimentation requires approval under section 4.

What does USE OF ARTIFICIAL INTELLIGENCE BY REGULATED FINANCIAL ENTITIES. of Unleashing AI Innovation in Financial Services Act do?

This section establishes a process for regulated financial entities to submit applications to financial regulatory agencies to engage in AI test projects through AI Innovation Labs. Applications must include a description of the AI project, an alternative compliance strategy waiving or modifying existing regulations, and an explanation of how the project serves the public interest and does not pose significant risks. The application must also include a proposed termination date, limitations on the project's size and scope, a detailed business plan, and an estimate of the project's impact. Financial regulatory agencies have 120 days to review applications and may extend this period by an additional 120 days. Approval is deemed automatic if the agency fails to act within the timeframe. Agencies must promulgate regulations within 180 days of the Act's enactment, addressing procedures for applications, reporting, disclosures, and confidentiality. Financial regulatory agencies are required to consult and coordinate to facilitate joint approvals and establish best practices related to AI innovation.

What does ANNUAL REPORT. of Unleashing AI Innovation in Financial Services Act do?

This bill, formally titled 'To establish AI Innovation Labs that permit certain persons to experiment with artificial intelligence without expectation of enforcement actions,' requires financial regulatory agencies to submit annual reports. These reports must be submitted to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services. The first report is due within two years of the Act's enactment, followed by reports each year for seven years. Reports should include aggregated findings, trends, and lessons learned from AI test projects. Reports may not include the names of participating entities or proprietary business information. Reports may contain a classified annex where appropriate.

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Unleashing AI Innovation in Financial Services Act

Last updated: 6/24/2026 · Introduced: 7/29/2025

Author: J. Hill (R-AR)

TL;DR (AI)

The bill establishes AI Innovation Labs within financial regulatory agencies to permit experimentation with artificial intelligence in financial products and services.
Regulated financial entities can submit applications to these labs to experiment with AI test projects under alternative compliance strategies, with agencies having 120 days to review applications.
Financial regulatory agencies can seek injunctive relief to halt an AI project if it poses an immediate danger or risk to consumers, financial markets, or national security, and must submit annual reports to Congress on the outcomes of AI test projects.

119th Congressin committeeS. 2528(In Committee)Official page

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Includes provisions on preamble, short title., and 4 more.

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