Legislation to Promote AI Innovation in Financial Services
On July 30, the Chair of the U.S. House Financial Services Committee, Representative French Hill (Republican-Arkansas), unveiled a new bill aimed at fostering innovation in financial technology through artificial intelligence. Titled the "Unleashing AI Innovation in Financial Services Act," this legislation introduces the creation of "AI Innovation Labs" where financial institutions can test AI applications free from enforcement actions.
Application and Regulatory Flexibility
The bill requires participating entities to submit an application for an "AI test project," detailing specific regulations they seek to modify or waive. Applicants must also propose alternative compliance methods that align with the original regulatory intent and justify the necessity of these alternatives. Upon approval, firms can operate under these alternative strategies for a designated period, with certain restrictions. Notably, other regulators cannot enforce their rules against the entity unless explicitly included in the application’s alternative compliance plan.
Regulatory Authority and Safeguards
Further...