[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4801 Reported in House (RH)]
<DOC>
Union Calendar No. 619
119th CONGRESS
2d Session
H. R. 4801
[Report No. 119-713]
To establish AI Innovation Labs that permit certain persons to
experiment with artificial intelligence without expectation of
enforcement actions.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 29, 2025
Mr. Hill of Arkansas (for himself, Mr. Torres of New York, Mr. Steil,
and Mr. Gottheimer) introduced the following bill; which was referred
to the Committee on Financial Services
June 24, 2026
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed
in italic]
[For text of introduced bill, see copy of bill as introduced on July
29, 2025]
_______________________________________________________________________
A BILL
To establish AI Innovation Labs that permit certain persons to
experiment with artificial intelligence without expectation of
enforcement actions.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Unleashing AI Innovation in
Financial Services Act''.
SEC. 2. DEFINITIONS.
In this section:
(1) AI test project.--The term ``AI test project'' means a
financial product, service, or activity--
(A) that falls under the jurisdiction of a
financial regulatory agency;
(B) that makes substantial use of artificial
intelligence;
(C) that is, or may be, subject to a Federal
regulation or Federal statute; and
(D) for which a regulated entity submits an
application for the waiver or modification of an
applicable regulation subject to an alternative
compliance strategy.
(2) Appropriate financial regulatory agency.--The term
``appropriate financial regulatory agency'' means--
(A) the appropriate Federal banking agency, as
defined in section 3 of the Federal Deposit Insurance
Act (12 U.S.C. 1813), with respect to an institution
described in subsection (q) of that section;
(B) the Securities and Exchange Commission, with
respect to an institution not described in subparagraph
(A) that is--
(i) any broker or dealer that is registered
with the Commission under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et seq.);
(ii) any investment company that is
registered with the Commission under the
Investment Company Act of 1940 (15 U.S.C. 80a-1
et seq.);
(iii) any investment adviser that is
registered with the Commission under the
Investment Advisers Act of 1940 (15 U.S.C. 80b-
1 et seq.);
(iv) any clearing agency registered with
the Commission under the Securities Exchange
Act of 1934 (15 U.S.C. 78a et seq.);
(v) any nationally recognized statistical
rating organization registered with the
Commission under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.);
(vi) any transfer agent registered with the
Commission under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.);
(vii) any exchange registered as a national
securities exchange with the Commission under
the Securities Exchange Act of 1934 (15 U.S.C.
78a et seq.);
(viii) any national securities association
registered with the Commission under the
Securities Exchange Act of 1934 (15 U.S.C. 78a
et seq.);
(ix) any securities information processor
registered with the Commission under the
Securities Exchange Act of 1934 (15 U.S.C. 78a
et seq.);
(x) the Municipal Securities Rulemaking
Board established under the Securities Exchange
Act of 1934 (15 U.S.C. 78a et seq.);
(xi) the Public Company Accounting
Oversight Board established under the Sarbanes-
Oxley Act of 2002 (15 U.S.C. 7211 et seq.);
(xii) the Securities Investor Protection
Corporation established under the Securities
Investor Protection Act of 1970 (15 U.S.C.
78aaa et seq.); and
(xiii) any security-based swap execution
facility, security-based swap data repository,
security-based swap dealer, or major security-
based swap participant registered with the
Commission under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.);
(C) the Bureau of Consumer Financial Protection,
with respect to a covered person, as defined in section
1002 of the Consumer Financial Protection Act of 2010
(12 U.S.C. 5481), that does not have an appropriate
financial regulatory agency under subparagraph (A),
(B), (D), or (E) of this paragraph;
(D) the National Credit Union Administration, with
respect to an insured credit union, as defined in
section 101 of the Federal Credit Union Act (12 U.S.C.
1752); and
(E) the Federal Housing Finance Agency, with
respect to--
(i) a Federal Home Loan Bank;
(ii) the Federal Home Loan Bank System;
(iii) the Federal National Mortgage
Association; and
(iv) the Federal Home Loan Mortgage
Corporation.
(3) Artificial intelligence; ai.--The terms ``artificial
intelligence'' and ``AI'' have the meaning given the term
``artificial intelligence'' in section 5002 of the National
Artificial Intelligence Initiative Act of 2020 (15 U.S.C.
9401).
(4) Commission.--The term ``Commission'' means the
Securities and Exchange Commission.
(5) Federal securities laws.--The term ``Federal securities
laws'' means--
(A) the Securities Act of 1933 (15 U.S.C. 77a et
seq.);
(B) the Securities Exchange Act of 1934 (15 U.S.C.
78a et seq.);
(C) the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201
et seq.);
(D) the Trust Indenture Act of 1939 (15 U.S.C.
77aaa et seq.);
(E) the Investment Company Act of 1940 (15 U.S.C.
80a-1 et seq.);
(F) the Investment Advisers Act of 1940 (15 U.S.C.
80b-1 et seq.);
(G) the Jumpstart Our Business Startup Act (Public
Law 112-106; 126 Stat. 306); and
(H) the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Public Law 111-203; 124 Stat. 1376).
(6) Financial product, service, or activity.--The term
``financial product, service, or activity''--
(A) includes--
(i) a financial product or service, as
defined in section 1002 of the Consumer
Financial Protection Act of 2010 (12 U.S.C.
5481);
(ii) activities that are financial in
nature, as defined in section 4(k)(4) of the
Bank Holding Company Act of 1956 (12 U.S.C.
1843(k)(4));
(iii) any financial product or service
provided by a person regulated by the
Commission, as defined in section 1002 of the
Consumer Financial Protection Act of 2010 (12
U.S.C. 5481); and
(iv) the offer or sale of any security
subject to the Federal securities laws;
(B) includes any internal activity of a regulated
entity that is carried out in furtherance of the
offering or sale of a product, service, or activity
described in subparagraph (A); and
(C) does not include the business of insurance, as
defined in section 1002 of the Consumer Financial
Protection Act of 2010 (12 U.S.C. 5481).
(7) Financial regulatory agency.--The term ``financial
regulatory agency'' means--
(A) the Board of Governors of the Federal Reserve
System;
(B) the Federal Deposit Insurance Corporation;
(C) the Office of the Comptroller of the Currency;
(D) the Securities and Exchange Commission;
(E) the Bureau of Consumer Financial Protection;
(F) the National Credit Union Administration; and
(G) the Federal Housing Finance Agency.
(8) Regulated entity.--The term ``regulated entity'' means
an entity regulated, or insured in the case of a credit union,
by any financial regulatory agency.
SEC. 3. AI INNOVATION LABS.
Each financial regulatory agency shall establish, or identify an
office, division, or department of the agency that shall serve as, an
``AI Innovation Lab'' to enable regulated entities to experiment with
AI test projects without unnecessary or unduly burdensome regulation or
expectation of enforcement actions, including enforcement actions that
disincentivize the substantial use of artificial intelligence to
enhance regulatory compliance practices, pursuant to the approval of an
application under section 4.
SEC. 4. USE OF ARTIFICIAL INTELLIGENCE BY REGULATED FINANCIAL ENTITIES.
(a) Application Submission.--
(1) In general.--Beginning one year after the date of
enactment of this Act, a regulated entity may submit to the
appropriate financial regulatory agency an application, on a
form determined by the appropriate financial regulatory agency,
to engage in an AI test project through an AI Innovation Lab.
(2) Contents.--An application submitted under paragraph (1)
shall include--
(A) a description of the AI test project proposed
to be carried out by the regulated entity, including--
(i) the type and capabilities of the
relevant AI technologies, systems, and
applications; and
(ii) the purposes and goals of the AI test
project;
(B) an alternative compliance strategy that--
(i) identifies a regulation issued by a
financial regulatory agency that the regulated
entity requests to be waived or modified;
(ii) proposes an alternative method for the
regulated entity to comply with the Federal
statute under which the regulation identified
in clause (i) is promulgated and the purpose of
such regulation, including an explanation as to
why the alternative method is essential to the
operation of the regulated entity and how the
regulated entity would effectively manage
risks, including cybersecurity risks,
associated with the AI test project;
(iii) describes applicable plans and
policies related to risk assessments, testing,
controls, documentation, and monitoring and
their role in managing risks described under
clause (ii); and
(iv) contains policies for the regulated
entity to maintain, consistent with applicable
law, cybersecurity standards, and contractual
limitations and obligations, records of the
activities of the AI test project, so long as
such policies do not require the regulated
entity to maintain any records that the
regulated entity is not permitted to maintain
pursuant to another law or any contractual
limitation or obligation;
(C) an explanation of how under the strategy
described in subparagraph (B), the AI test project--
(i) would serve the public interest,
improve consumer or investor access to a
financial product, service, or activity, or
promote consumer or investor protection;
(ii) would enhance efficiency or
operations, foster innovation or
competitiveness, improve risk management and
security, including cybersecurity, or enhance
regulatory compliance;
(iii) would not present--
(I) a significant risk of loss to
the Deposit Insurance Fund or the
National Credit Union Share Insurance
Fund where the regulated entity is an
insured depository institution or
insured credit union; or
(II) a systemic risk to the
financial system of the United States;
(iv) is consistent with the purposes of the
anti-money laundering and countering the
financing of terrorism obligations under
subchapter II of chapter 53 of title 31, United
States Code; and
(v) would not present a national security
risk to the United States;
(D) a proposed date on which the AI test project
would terminate and an explanation why such termination
date would be appropriate;
(E) proposed limitations on the size, scope, and
growth of the AI test project;
(F) a detailed business plan; and
(G) an estimate of the economic, market,
operational, and public interest impact of the AI test
project if approved.
(3) Joint applications.--Two or more regulated entities may
submit a joint application to the same financial regulatory
agency under paragraph (2).
(4) Regulations of other agencies.--
(A) In general.--Notwithstanding paragraph (2), a
regulated entity may submit an application under this
subsection for an alternative compliance strategy for a
regulation issued or enforced by a financial regulatory
agency that is not the appropriate financial regulatory
agency for the regulated entity.
(B) Requirements.--An application described in
subparagraph (A) shall be subject to the same
requirements as an application described in paragraph
(2), except that--
(i) the regulated entity shall submit the
application to--
(I) the appropriate financial
regulatory agency; and
(II) any other financial regulatory
agency that--
(aa) issued the regulation
that is the subject of the
alternative compliance strategy
and has jurisdiction over the
regulated entity with respect
to such regulation; or
(bb) enforces the
regulation that is the subject
of the alternative compliance
strategy with respect to the
regulated entity; and
(ii) the AI test project may not take
effect unless the application is jointly
approved by--
(I) the appropriate financial
regulatory agency; and
(II) each other financial
regulatory agency described in clause
(i)(II).
(5) Notice.--A regulated entity that is regulated by, or
subject to regulations that are enforced by, more than 1
financial regulatory agency shall provide notice of any
application submitted to the appropriate financial regulatory
agency under this section to each such financial regulatory
agency not later than 5 business days after the regulated
entity submits the application to the appropriate financial
regulatory agency.
(6) Notice of intervening agency.--
(A) Notice of intervention.--A financial regulatory
agency that receives a notice under paragraph (5) with
respect to an application regarding a regulation that
such agency issued or enforces may, within 30 days of
receiving such notice, issue a notice of intervention
to the regulated entity and the appropriate financial
regulatory agency of such regulated entity.
(B) Joint approval required.--If a financial
regulatory agency issues a notice of intervention
described in subparagraph (A), the applicable AI test
project may not take effect unless such financial
regulatory agency, jointly with the financial
regulatory agencies described in paragraph (4)(B)(ii),
approves the application.
(7) Agency review.--
(A) In general.--Except as provided in subparagraph
(D), not later than 120 days after the date on which a
complete application is received by a financial
regulatory agency under this subsection, the financial
regulatory agency shall--
(i) review the application and assess, to
the extent reasonably practicable, the
applicant's ability to satisfy the standards
described in subparagraphs (B) and (C) of
paragraph (2); and
(ii) submit to the applicant in writing a
determination of the agency.
(B) Approval.--
(i) In general.--If the applicant shows
that it is more likely than not that the
application meets the requirements for
establishing an alternative compliance strategy
and satisfies the standards described in
subparagraphs (B) and (C) of paragraph (2), the
financial regulatory agency shall approve the
application and notify the applicant in writing
of--
(I) the regulation that is the
subject of the alternative compliance
strategy;
(II) the terms of the alternative
compliance strategy for the AI test
project;
(III) the date on which the AI test
project will terminate;
(IV) any limitations on the size,
scope, or growth of the AI test
project; and
(V) any additional limitations or
conditions on the AI test project, as
determined by the financial regulatory
agency.
(ii) Effect of approval.--With respect to
an AI test project, beginning on the date on
which an application submitted under paragraph
(1) is approved and ending on the date
described in clause (i)(III)--
(I) the appropriate financial
regulatory agency may enforce a
regulation described in clause (i)(I)
only in the manner set out in the
alternative compliance strategy
described in clause (i)(II), subject to
limitations or conditions described in
subclauses (IV) and (V) of clause (i);
and
(II) except as provided in clause
(iii), a financial regulatory agency
that is not the appropriate financial
regulatory agency may not enforce a
regulation described in clause (i)(I).
(iii) Enforcement by another financial
regulatory agency.--With respect to an AI test
project, a financial regulatory agency other
than the appropriate financial regulatory
agency may enforce a regulation described in
clause (i)(I) if--
(I) such other financial regulatory
agency issued or enforces such
regulation;
(II) the approval of such other
financial regulatory agency was
required for the AI test project under
paragraph (4)(B)(ii)(II) or (6)(B); and
(III) the alternative compliance
strategy described in subclause clause
(i)(II) provides for enforcement by
such other financial regulatory agency.
(C) Denial, resubmittal, and relief.--
(i) In general.--If a financial regulatory
agency denies an application, the financial
regulatory agency--
(I) shall submit to the applicant a
written notice explaining the reason
for denial; and
(II) may not take an enforcement
action related to the proposed AI test
project against the applicant earlier
than the date that is 30 days after the
date on which the financial regulatory
agency submits such written notice.
(ii) Resubmittals.--Each time an
application submitted under paragraph (1) is
denied, the regulated entity--
(I) may submit an amended
application after receiving feedback
from the financial regulatory agency
making such denial; and
(II) may not resubmit more than 2
applications that are substantially
similar to the denied application.
(iii) Injunctive relief.--Notwithstanding
clause (i)(II), a financial regulatory agency,
by and through its own attorneys, may file a
civil action in an appropriate United States
district court to enjoin an active AI test
project if the financial regulatory agency
determines that the AI test project--
(I) presents an immediate danger to
consumers or investors; or
(II) presents a risk--
(aa) to financial markets;
(bb) in the case of an AI
test project engaged in by an
insured depository institution
or an insured credit union, of
loss to a Federal deposit or
share insurance fund;
(cc) of a violation of
anti-money laundering and
countering the financing of
terrorism obligations under
subchapter II of chapter 53 of
title 31, United States Code;
or
(dd) to the national
security of the United States.
(iv) Rule of construction on certain
administrative orders.--Nothing in clause (iv)
shall be construed to limit a financial
regulatory agency's authority to issue an
administrative order to cease the activity of
an active AI test project where the agency
determines such activity is causing unmitigable
or irreparable harm to consumers, investors, or
financial stability.
(D) Extension; failure to make a determination.--If
a financial regulatory agency determines additional
time is needed to make a determination on a complete
application received under this subsection, the
financial regulatory agency may extend the 120-day
deadline by one additional 120-day period. If the
financial regulatory agency does not approve or deny
the application by the end of the initial 120-day
period (or the 240-day period, in the case of
extension), the financial regulatory agency shall be
deemed to have approved the application.
(E) Additional information.--During the applicable
120-day determination period (or the 240-day period, in
the case of extension), a financial regulatory agency
may request additional information from the regulated
entity.
(F) Rule of construction on fraud and market
manipulation authority.--Nothing in subparagraph (B) or
(C) may be construed to limit the authority of a
financial regulatory agency to take an enforcement
action against a regulated entity with respect to fraud
or market manipulation or for engaging in an unsafe or
unsound practice.
(8) Data security.--All data supplied by sponsors of AI
test projects to a financial regulatory agency submitted under
this section shall be stored and maintained in a secure manner
by the financial regulatory agency, consistent with applicable
data security standards.
(9) Regulations.--Not later than 180 days after the date of
enactment of this Act, each financial regulatory agency shall
promulgate regulations implementing this Act that--
(A) shall be published in the Federal Register and
provide a 60-day period for public notice and comment;
and
(B) include--
(i) procedures for submitting applications
for AI test projects and for modifying the AI
test projects that are approved by the agency;
(ii) consequences for failure to comply
with the terms of an alternative compliance
strategy;
(iii) a requirement that an AI test project
will include a specified termination date;
(iv) procedures to extend the termination
date described in clause (iii) for a specified
time period;
(v) requirements for regulated entities to
report the status and progress of AI test
projects at a frequency reasonably necessary
for carrying out this Act and the rules
promulgated thereunder;
(vi) requirements for regulated entities to
make disclosures reasonably appropriate to
inform consumers or investors regarding any
direct interaction with an AI test project,
which shall be tailored to the scale, scope,
and risks thereof and describe the nature of
the AI test project and its applicable
alternative compliance strategy;
(vii) procedures for maintaining, as
appropriate and consistent with applicable law,
the confidentiality, security, and privacy of
information;
(viii) consideration of the type and
capabilities of proposed AI test projects'
relevant AI technologies, systems, and
applications in the development of applicable
guidance and requirements;
(ix) procedures for assigning appropriate
personnel to serve as liaisons and points of
contact for regulated entities with approved AI
test projects; and
(x) procedures for coordinating decisions
relating to applications submitted jointly by
multiple regulated entities or applications
submitted to more than one financial regulatory
agency.
(b) Interagency Coordination and Consultation.--The financial
regulatory agencies shall consult, share information, and coordinate,
and may enter into a joint memorandum of understanding, in order to--
(1) facilitate any joint approvals of applications;
(2) understand and establish best practices with respect
to--
(A) AI innovation Labs;
(B) promulgating and updating guidance and rules
related to financial products, services, and activities
that make substantial use of artificial intelligence
based on the lessons learned from AI test projects; and
(C) AI test project applications, approvals,
alternative compliance methods, conditions, terms,
reporting, disclosures, oversight, and guidance; and
(3) avoid unnecessary, duplicative, or conflicting
processes or efforts with respect to AI test project
applications, approvals, reporting, and disclosures.
SEC. 5. ANNUAL REPORT.
(a) In General.--Not later than 2 years after the date of enactment
of this Act, and each year for 7 years thereafter, each financial
regulatory agency shall submit to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on Financial Services
of the House of Representatives an annual report on the outcomes of AI
test projects. A report under this subsection shall include aggregated
findings, trends, and lessons learned from the AI test projects.
(b) Confidentiality.-- A report under this section--
(1) may not include the names of participating entities or
any proprietary or confidential business information; and
(2) where appropriate, may contain a classified annex.
Union Calendar No. 619
119th CONGRESS
2d Session
H. R. 4801
[Report No. 119-713]
_______________________________________________________________________
A BILL
To establish AI Innovation Labs that permit certain persons to
experiment with artificial intelligence without expectation of
enforcement actions.
_______________________________________________________________________
June 24, 2026
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed