Heinrich, Rounds Lead Bipartisan, Bicameral Effort for AI Innovation in Financial Services
WASHINGTON — U.S. Senators Martin Heinrich (D-N.M.) and Mike Rounds (R-S.D.) introduced bipartisan legislation to promote artificial intelligence (AI) innovation in the financial services industry. The Unleashing AI Innovation in Financial Services Act would establish regulatory guardrails at financial regulatory agencies for regulated entities to test AI projects, allowing them to experiment with cutting-edge technologies in a safe way. The legislation is led by U.S. Representatives French Hill (R-Ark.) and Ritchie Torres (D-N.Y.) in the House.
“To unlock AI’s full potential and ensure it is deployed responsibly, we need regulatory guardrails that are informed by real-life use cases,” said Heinrich. “The Unleashing AI Innovation in Financial Services Act will enable the private sector and government agencies to work together — encouraging innovation that protects consumers in the financial services sector.”
“The financial services industry has been using AI for decades, but as major advancements in the technology emerge, companies must be able to innovate,” said Rounds. “The Unleashing AI Innovation in Financial Services Act is designed to foster innovation and economic growth by providing a controlled environment where new financial products and services that use AI can be tested. By creating these sandboxes, we aim to strike a balance between encouraging innovation and maintaining consumer protection, ultimately strengthening our financial system and keeping our country at the forefront of global financial technology. I want to thank my bipartisan, bicameral partners for coming together on this legislation."
“AI is a rapidly advancing tool that we need to fully understand because it is going to impact every aspect of our lives,” said Hill. “The Unleashing AI Innovation Financial Services Act would ensure our federal agencies allow for the companies they regulate to experiment with AI in regulatory sandboxes. This is a pivotal step to allow both government and the private sector to collaborate and learn together, as the U.S. must lead in the development and use of AI technology. I thank Rep. Richie Torres (D-NY) for leading this bill with me and for Senators Mike Rounds (R-SD) and Sen. Martin Heinrich (D-NM) for introducing companion legislation in the Senate as it is crucial we push our legislation forward to make sure we get AI regulation right while allowing for innovation and experimentation.”
“As emerging technologies drive immense change within the financial sector, there is always the question of how to balance innovation with consumer protection,” said Torres. “That is why I am proud to support the bipartisan Unleashing AI Innovation in Financial Services Act, which will encourage the use of new AI technology in the financial services sector while maintaining regulations that protect the public. We will continue pushing for enhanced competitiveness and results while ensuring that consumers’ interests remain paramount.”
The Unleashing AI Innovation in Financial Services Act establishes regulatory guardrails for AI test projects at the Federal Reserve, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the Securities and Exchange Commission (SEC), the Consumer Financial Protection Bureau (CFPB), the National Credit Union Administration (NCUA) and the Federal Housing Finance Agency (FHFA). Regulated entities would apply through their primary regulator and must be able to demonstrate the project will serve the public interest (including consumer protection), enhance efficiency or increase competitiveness, and not present a systemic risk to the financial system.
The full text of the bill is here.
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