Congress·In Committee·S. 2528

Congress Proposes 'Innovation Labs' to Let Banks Test AI Tools Under Relaxed Regulations

Unleashing AI Innovation in Financial Services Act

8 months ago·View on Congress.gov

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Stalled

No legislative action in over 90 days.

Legislative Progress

Senate

House

President

Law

Key Points

This bill would require major financial agencies—including those that oversee banks, credit unions, and the stock market—to create 'AI Innovation Labs.' These labs would allow companies to test new artificial intelligence tools for financial products, like loans or investment apps, under more flexible rules.
Banks and investment firms could apply to use these labs by proposing an 'alternative' way to follow the law. If approved, the company could test its AI technology for at least one year without fear of being sued or fined by the government for not following the standard, stricter regulations.
To get into the program, a company must prove its AI project will help customers, improve efficiency, and not create risks for the U.S. financial system or national security. Agencies have 120 days to review these applications, and if they take too long, the project is automatically allowed to move forward.
While the bill offers more freedom for tech testing, it includes safety nets. Government agencies can still take immediate action or shut down a project if they find evidence of fraud, or if the AI poses a direct danger to consumers' money and the safety of the banking system.

Economy FinanceTechnology Digital

Impact Analysis

Personal Impact

Who is affectedScoreImpactCertaintyScopeDurationSentiment

Scores: 1 = low, 5 = highSentiment: -5 to +5 (net benefit)

Milestones

2 milestones2 actions

Jul 29, 2025Senate

Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Jul 29, 2025

Introduced in Senate

What Happens Next

Projected impacts based on AI analysis

180 days after enactment

Financial agencies must publish proposed rules for how the AI Innovation Labs will work

The public would get 60 days to comment on how these testing programs are set up, including what consumer protections are included. This shapes how the program actually works in practice.

Related News

3 articles

The Hill·over 1 year ago

House lawmakers introduce bill to create AI 'innovation labs' at financial agencies

Reps. French Hill and Ritchie Torres introduced the Unleashing AI Innovation in Financial Services Act. The bill would require agencies like the SEC and Fed to create 'innovation labs' where firms can test AI tools under a regulatory sandbox with temporary safe harbor from enforcement.

Reuters·over 1 year ago

US lawmakers introduce bipartisan bill on AI innovation in financial services

The legislation aims to foster AI adoption by creating dedicated labs at major financial regulators. It includes a 'deemed approved' clause, where a company's application to test AI under alternative rules is automatically granted if the agency fails to issue a decision within 120 days.

Politico·over 1 year ago

Bipartisan AI sandbox bill hits the House

The Unleashing AI Innovation in Financial Services Act would allow banks to propose alternative compliance methods for AI tools. If regulators approve, the firms get a year-long shield from lawsuits and fines while testing the technology in a controlled environment.

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