Central South Dakota News

A bipartisan group of lawmakers has reintroduced legislation aimed at supporting the use of artificial intelligence (AI) in the financial services sector. The Unleashing AI Innovation in Financial Services Act, announced Wednesday, seeks to direct federal financial regulatory agencies to establish Innovation Labs where regulated entities can test and develop AI projects.

The bill is led by Senators Mike Rounds (R-S.D.), Martin Heinrich (D-N.M.), Thom Tillis (R-N.C.), Andy Kim (D-N.J.) and Representatives French Hill (R-Ark.), Ritchie Torres (D-N.Y.), Bryan Steil (R-Wis.), and Josh Gottheimer (D-N.J.). The legislation has support from the U.S. Chamber of Commerce.

The proposed act would require agencies such as the Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Securities and Exchange Commission, Consumer Financial Protection Bureau, National Credit Union Administration, and Federal Housing Finance Agency to set up innovation labs. These labs would allow companies to experiment with new financial products and services using AI under controlled conditions. Regulated entities seeking to participate must apply through their primary regulator and show that their projects serve the public interest, improve efficiency or competitiveness, and do not pose systemic risks.

The move comes shortly after the Trump administration released its AI Action Plan earlier this month. The plan recommends creating regulatory AI Centers of Excellence within agencies like the SEC to test AI tools while sharing findings with relevant partners.

Senator Mike Rounds stated: “The financial services industry has been using AI for decades, but companies must have the opportunity to innovate as major advancements continue to develop. 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. I’m pleased that the Trump administration shares this vision, as outlined in their recent AI Action Plan. By creating these innovation labs, 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.”

Senator Heinrich added: “To unlock AI’s full potential and ensure it is deployed responsibly, we need regulatory guardrails that are informed by real-life use cases. Our Unleashing AI Innovation in Financial Services Act does exactly this by enabling the private sector and government agencies to work together and encourage innovation that protects consumers.”

Representative Hill said: “As AI continues to evolve, we must understand its full impact because it will touch every part of our lives. The Unleashing AI Innovation in Financial Services Act ensures that federal financial agencies allow the companies they oversee to experiment with AI through regulatory sandboxes. Our Committee looks forward to exploring AI and its uses in the financial services industry. We are committed to fostering innovation and collaboration between the public and private sectors. I’m grateful to my bipartisan House colleagues and to Senator Mike Rounds for leading this effort in the Senate. Advancing this bill is key to keeping the U.S. at the forefront of AI innovation in financial services.”

Representative Torres also commented: “In the face of rapid AI advancement, Congress has a responsibility to ensure responsible innovation that protects consumers, strengthens our economy, and maintains American leadership. I’m proud to co-lead this bipartisan, bicameral effort alongside Congressman French Hill to create AI Innovation Labs, giving regulators a safe and structured way to engage with cutting-edge technologies. This bill ensures that innovation and oversight go hand in hand.”

The full text of the bill is available online.