The House Financial Services Committee is advancing legislation aimed at providing guardrails for the utilization of artificial intelligence (AI). The Unleashing AI Innovation in Financial Services Act (HR 4801) will seek to create AI Innovation Labs that allow individuals to experiment with AI without the expectation of an enforcement action.
As AI is already widely used within the Fintech realm, the bill is an acknowledgement that certain services may become automated potentially creating new risks.
The bil states that each financial regulator 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.”
There are multiple regulators who interact with financial services firms, and the language prescribes the following agencies:
- The Board of Governors of the Federal Reserve System;
- The Federal Deposit Insurance Corporation;
- The Office of the Comptroller of the Currency;
- The Securities and Exchange Commission;
- The Bureau of Consumer Financial Protection
- The National Credit Union Administration; and
- The Federal Housing Finance Agency.
The American Fintech Council (AFC) has stated to the House Financial Services Committee in support of legislation that fosters responsible AI innovation across the financial services ecosystem.
Phil Goldfeder, CEO of the American Fintech Council, said the bill is a standard for a thoughtful, bipartisan framework that gives regulators the tools they need.
“AI has the potential to make financial services safer, more accessible, and more inclusive,” said Goldfeder, while expressing the goal of keeping America’s leadership role in financial innovation.
The Committee is holding a hearing today addressing AI. The hearing will examine AI use cases in the financial services and assess how existing laws and regulations apply, identifying where current frameworks are effective and where gaps may create uncertainty or hinder innovation.
The hearing will also explore interagency coordination to ensure AI oversight is consistent, clear, and supportive of innovation, competition, and consumer protection.
