Unleashing AI Innovation in Financial Services Act
- Bill Number
- H.R. 4801
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2026-06-24: Placed on the Union Calendar, Calendar No. 619.
- Last Updated
- 2026-07-09T19:06:13Z
AI-Generated Summary
Purpose This legislation establishes a framework for financial regulatory agencies to create AI Innovation Labs. These labs allow regulated financial entities to test artificial intelligence (AI) applications in financial products, services, or activities under modified regulatory conditions, without the usual expectation of enforcement actions during the approved testing period.
Key Provisions
- Definitions: The bill defines key terms, including "AI test project" (a financial activity using substantial AI that seeks regulatory waivers), "appropriate financial regulatory agency" (covering the Federal Reserve, FDIC, OCC, SEC, CFPB, NCUA, and FHFA), and "regulated entity" (institutions overseen by these agencies). It excludes insurance activities.
- AI Innovation Labs: Each financial regulatory agency must establish or designate an office to oversee these labs, enabling experimentation with AI while managing risks such as cybersecurity.
- Application Process: Regulated entities may submit applications starting one year after enactment. Applications require details on the AI technology, an alternative compliance strategy (identifying specific regulations for waiver or modification), risk management plans, public interest benefits, termination dates, size limitations, and economic impact estimates. Joint applications and multi-agency reviews are permitted.
- Review and Approval: Agencies must decide within 120 days (extendable by another 120 days); failure to act results in deemed approval. Approval allows temporary enforcement only under the approved alternative strategy. Denials require written explanations, with limited resubmission rights.
- Enforcement Safeguards: Agencies retain authority to act against fraud, market manipulation, or immediate dangers to consumers, markets, or national security. Injunctive relief is available for urgent risks.
- Interagency Coordination: Agencies must consult, share information, and coordinate on approvals and best practices.
- Reporting and Rules: Agencies issue implementing regulations within 180 days and submit annual reports to Congress for eight years on project outcomes, without disclosing proprietary data.
Significant Changes to Existing Law The bill introduces a regulatory sandbox mechanism for AI in financial services. It permits temporary waivers or modifications of existing regulations issued under statutes such as the Securities Exchange Act of 1934 or the Consumer Financial Protection Act of 2010, provided an alternative compliance method is approved. This represents a shift from standard enforcement to structured experimentation, while preserving core authorities over fraud and systemic risks.
Potential Impacts
- Government Agencies: Financial regulators face new responsibilities for application reviews, lab operations, interagency coordination, and annual reporting, potentially increasing administrative workload.
- Citizens and Businesses: Regulated entities gain opportunities to innovate with AI for improved efficiency, risk management, and compliance. Consumers and investors may benefit from enhanced financial products or protections, though projects must demonstrate no significant risks to deposit insurance funds or market stability.
- International Relations: No direct provisions address international matters, though the framework could indirectly support U.S. financial competitiveness in AI development.
Main Stakeholders Affected
- Financial regulatory agencies (Federal Reserve, FDIC, OCC, SEC, CFPB, NCUA, FHFA).
- Regulated entities, including banks, broker-dealers, investment advisers, credit unions, and housing finance entities.
- Consumers and investors who interact with AI-driven financial products.
- Congress, through oversight via annual reports.
Notable Legal, Constitutional, or Political Implications The legislation operates within Congress's authority to regulate interstate commerce and financial markets. It maintains agency enforcement powers for critical risks while limiting routine actions during approved tests. The bill shows bipartisan sponsorship and emphasizes safeguards for national security, anti-money laundering rules, and consumer protection. No major constitutional issues are evident in the text.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (3)
Rep. Torres, Ritchie [D-NY-15], Rep. Steil, Bryan [R-WI-1], Rep. Gottheimer, Josh [D-NJ-5]
Recent Actions
- 2026-06-24: Placed on the Union Calendar, Calendar No. 619.
- 2026-06-24: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-713.
- 2026-06-24: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-713.
- 2026-05-13: Ordered to be Reported (Amended) by the Yeas and Nays: 33 - 19.
- 2026-05-13: Committee Consideration and Mark-up Session Held
- 2025-07-29: Referred to the House Committee on Financial Services.
- 2025-07-29: Introduced in House
- 2025-07-29: Introduced in House
Bill Versions
- Unleashing AI Innovation in Financial Services Act — issued 2025-07-29 — PDF (21 pages)
- Unleashing AI Innovation in Financial Services Act — issued 2026-06-24 — PDF (28 pages)