This bill establishes regulatory sandboxes that allow financial companies to test artificial intelligence products and services with reduced regulatory burden. Under the legislation, companies regulated by agencies like the Federal Reserve, SEC, CFPB, and others can apply to experiment with AI-based financial products without fear of retroactive enforcement actions, provided they demonstrate the projects serve the public interest, don't pose systemic risks, and comply with anti-money laundering requirements. Applications must be reviewed within 90 days, and if an agency doesn't make a decision within that timeframe, the application is automatically approved. Each AI test project would operate under an alternative compliance strategy tailored to the specific experiment, with defined limits on size and scope, and would terminate after a set period (minimum one year). Financial regulatory agencies must establish these sandboxes within 180 days and issue regulations governing the process, and they are required to submit annual reports to Congress on the outcomes of approved projects.
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