This bill creates "regulatory sandboxes" that allow financial companies to test artificial intelligence products and services with reduced regulatory oversight. Financial institutions regulated by agencies like the Federal Reserve, SEC, FDIC, and others can apply to experiment with AI-based financial products without fear of enforcement actions, provided they demonstrate their projects serve the public interest, don't pose systemic risks, and comply with anti-money laundering requirements. Regulatory agencies have 90 days to approve or deny applications, with automatic approval if they miss the deadline, and must complete their sandbox regulations within 180 days of the bill's enactment. Each agency must also submit annual reports to Congress on the outcomes of approved AI test projects. The bill affects all regulated financial entities including banks, investment firms, credit unions, and mortgage companies seeking to innovate with artificial intelligence.
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