House and Senate Lawmakers Introduce Bill to Create "AI Innovation Labs"

A bipartisan group of legislators introduced a bill in the Senate and House to create "AI Innovation Labs" to encourage financial firms "to experiment with artificial intelligence without expectation of enforcement action." 

The "Unleashing AI Innovation in Financial Services Act" would establish AI Innovation Labs at each federal financial regulator that could review applications from the entities they regulate to engage in "AI test projects" that could receive a regulatory waiver.

Applicants would be required to describe their plans in detail, including how the plan would benefit investors and do so without injuring national security interests or creating systemic risk.  Regulators would continue to have oversight over the test projects and could modify the terms of their regulatory waivers or stop the projects entirely. 

The Innovation Labs would be required to publish an annual report of their findings.  

Chair of the House Financial Services Committee French Hill said that this bill "ensures that federal financial agencies allow the companies they oversee to experiment with AI through regulatory sandboxes."

Senator Mike Rounds reintroduced the bill stating: "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."