I 
119TH CONGRESS 
1ST SESSION H. R. 4801 
To establish AI Innovation Labs that permit certain persons to experiment 
with artificial intelligence without expectation of enforcement actions. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 29, 2025 
Mr. HILL of Arkansas (for himself, Mr. TORRES of New York, Mr. STEIL, 
and Mr. GOTTHEIMER) introduced the following bill; which was referred 
to the Committee on Financial Services 
A BILL 
To establish AI Innovation Labs that permit certain persons 
to experiment with artificial intelligence without expecta-
tion of enforcement actions. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Unleashing AI Innova-
tion in Financial Services Act’’. 
SEC. 2. DEFINITIONS. 
In this section: 
(1) AI TEST
PROJECT.—The term ‘‘AI test 
project’’ means a financial product or service that— 
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
(A) falls under the jurisdiction of a finan-
cial regulatory agency; 
(B) makes substantial use of artificial in-
telligence; and 
(C) is, or may be, subject to a Federal reg-
ulation or Federal statute. 
(2) APPROPRIATE
FINANCIAL
REGULATORY 
AGENCY.—The term ‘‘appropriate financial regu-
latory agency’’ means— 
(A) the appropriate Federal banking agen-
cy, as defined in section 3 of the Federal De-
posit Insurance Act (12 U.S.C. 1813), with re-
spect to an institution described in subsection 
(q) of that section; 
(B) the Securities and Exchange Commis-
sion, with respect to an institution not de-
scribed in subparagraph (A) that is— 
(i) any broker or dealer that is reg-
istered with the Commission under the Se-
curities Exchange Act of 1934 (15 U.S.C. 
78a et seq.); 
(ii) any investment company that is 
registered with the Commission under the 
Investment Company Act of 1940 (15 
U.S.C. 80a–1 et seq.); 
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
(iii) any investment adviser that is 
registered with the Commission under the 
Investment Advisers Act of 1940 (15 
U.S.C. 80b–1 et seq.); 
(iv) any clearing agency registered 
with the Commission under the Securities 
Exchange Act of 1934 (15 U.S.C. 78a et 
seq.); 
(v) any nationally recognized statis-
tical rating organization registered with 
the Commission under the Securities Ex-
change Act of 1934 (15 U.S.C. 78a et 
seq.); 
(vi) any transfer agent registered with 
the Commission under the Securities Ex-
change Act of 1934 (15 U.S.C. 78a et 
seq.); 
(vii) any exchange registered as a na-
tional securities exchange with the Com-
mission under the Securities Exchange Act 
of 1934 (15 U.S.C. 78a et seq.); 
(viii) any national securities associa-
tion registered with the Commission under 
the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.); 
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
(ix) any securities information proc-
essor registered with the Commission 
under the Securities Exchange Act of 1934 
(15 U.S.C. 78a et seq.); 
(x) the Municipal Securities Rule-
making Board established under the Secu-
rities Exchange Act of 1934 (15 U.S.C. 
78a et seq.); 
(xi) the Public Company Accounting 
Oversight Board established under the 
Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7211 et seq.); 
(xii) the Securities Investor Protection 
Corporation established under the Securi-
ties Investor Protection Act of 1970 (15 
U.S.C. 78aaa et seq.); and 
(xiii) any security-based swap execu-
tion facility, security-based swap data re-
pository, security-based swap dealer, or 
major security-based swap participant reg-
istered with the Commission under the Se-
curities Exchange Act of 1934 (15 U.S.C. 
78a et seq.), with respect to the security- 
based swap activities of the person that re-
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
quire such person to be registered under 
such Act; 
(C) the Bureau of Consumer Financial 
Protection, with respect to a covered person, as 
defined in section 1002 of the Consumer Finan-
cial Protection Act of 2010 (12 U.S.C. 5481), 
that does not have an appropriate financial reg-
ulatory agency under subparagraph (A), (B), 
(D), or (E) of this paragraph; 
(D) the National Credit Union Administra-
tion, with respect to an insured credit union, as 
defined in section 101 of the Federal Credit 
Union Act (12 U.S.C. 1752); and 
(E) the Federal Housing Finance Agency, 
with respect to— 
(i) a Federal Home Loan Bank; 
(ii) the Federal Home Loan Bank 
System; 
(iii) the Federal National Mortgage 
Association; and 
(iv) the Federal Home Loan Mortgage 
Corporation. 
(3) ARTIFICIAL INTELLIGENCE; AI.—The terms 
‘‘artificial intelligence’’ and ‘‘AI’’ have the meaning 
given the term ‘‘artificial intelligence’’ in section 
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
5002 of the National Artificial Intelligence Initiative 
Act of 2020 (15 U.S.C. 9401). 
(4) COMMISSION.—The term ‘‘Commission’’ 
means the Securities and Exchange Commission. 
(5) FEDERAL
SECURITIES
LAWS.—The term 
‘‘Federal securities laws’’ means— 
(A) the Securities Act of 1933 (15 U.S.C. 
77a et seq.); 
(B) the Securities Exchange Act of 1934 
(15 U.S.C. 78a et seq.); 
(C) the Sarbanes-Oxley Act of 2002 (15 
U.S.C. 7201 et seq.); 
(D) the Trust Indenture Act of 1939 (15 
U.S.C. 77aaa et seq.); 
(E) the Investment Company Act of 1940 
(15 U.S.C. 80a–1 et seq.); 
(F) the Investment Advisers Act of 1940 
(15 U.S.C. 80b–1 et seq.); 
(G) the Jumpstart Our Business Startup 
Act (Public Law 112–106; 126 Stat. 306); and 
(H) the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (Public Law 
111–203; 124 Stat. 1376). 
(6) FINANCIAL
PRODUCT
OR
SERVICE.—The 
term ‘‘financial product or service’’— 
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
(A) has the meaning given the term in sec-
tion 1002 of the Consumer Financial Protection 
Act of 2010 (12 U.S.C. 5481); 
(B) includes— 
(i) activities that are financial in na-
ture, as defined in section 4(k)(4) of the 
Bank Holding Company Act of 1956 (12 
U.S.C. 1843(k)(4)); 
(ii) any financial product or service 
provided by a person regulated by the 
Commission, as defined in section 1002 of 
the Consumer Financial Protection Act of 
2010 (12 U.S.C. 5481); and 
(iii) includes the offer or sale of any 
security subject to the Federal securities 
laws; and 
(C) does not include the business of insur-
ance. 
(7) FINANCIAL
REGULATORY
AGENCY.—The 
term ‘‘financial regulatory agency’’ means— 
(A) the Board of Governors of the Federal 
Reserve System; 
(B) the Federal Deposit Insurance Cor-
poration; 
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
(C) the Office of the Comptroller of the 
Currency; 
(D) the Securities and Exchange Commis-
sion; 
(E) the Bureau of Consumer Financial 
Protection; 
(F) the National Credit Union Administra-
tion; and 
(G) the Federal Housing Finance Agency. 
(8) REGULATED ENTITY.—The term ‘‘regulated 
entity’’ means an entity regulated by any financial 
regulatory agency. 
SEC. 3. USE OF ARTIFICIAL INTELLIGENCE BY REGULATED 
FINANCIAL ENTITIES. 
(a) AI INNOVATION LABS.— 
(1) ESTABLISHMENT.—Each financial regu-
latory agency 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 ex-
pectation of enforcement actions, pursuant to the 
approval of an application under paragraph (2). 
(2) APPLICATIONS.— 
(A) SUBMISSION.— 
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
(i) IN GENERAL.—A regulated entity 
may submit to the appropriate financial 
regulatory agency an application, on a 
form determined by the appropriate finan-
cial regulatory agency, to engage in an AI 
test project through the AI Innovation Lab 
established or identified under paragraph 
(1). 
(ii) CONTENTS.—An application sub-
mitted under clause (i) shall include— 
(I) a description of the AI test 
project proposed to be carried out by 
the regulated entity; 
(II) an alternative compliance 
strategy that— 
(aa) identifies a regulation 
issued by the appropriate finan-
cial regulatory agency that the 
regulated entity requests to be 
waived or modified; and 
(bb) proposes an alternative 
method for the regulated entity 
to comply with the regulation, in-
cluding an explanation as to why 
the alternative method is essen-
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
tial to the operation of the entity 
and how the regulated entity 
would effectively manage risks 
associated 
with 
the 
AI 
test 
project; 
(III) an explanation of how under 
the strategy described in subclause 
(II), the AI test project— 
(aa) would serve the public 
interest, improve consumer or in-
vestor access to a financial prod-
uct or service, or promote con-
sumer or investor protection; 
(bb) would enhance effi-
ciency or operations, foster inno-
vation or competitiveness, im-
prove risk management and secu-
rity, or enhance regulatory com-
pliance; 
(cc) would not present a sys-
temic risk to the financial system 
of the United States; 
(dd) is consistent with the 
purposes of the anti-money laun-
dering and countering the financ-
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
ing of terrorism obligations under 
subchapter II of chapter 53 of 
title 31, United States Code; and 
(ee) would not present a na-
tional security risk to the United 
States; 
(IV) a proposed date on which 
the AI test project would terminate 
and an explanation why such termi-
nation date would be appropriate; 
(V) proposed limitations on the 
size, scope, and growth of the AI test 
project; 
(VI) a detailed business plan; 
and 
(VII) an estimate of the eco-
nomic impact of the AI test project if 
approved. 
(iii) JOINT
APPLICATIONS.—Two or 
more regulated entities may submit a joint 
application to the same financial regu-
latory agency under clause (i). 
(iv) REGULATIONS OF OTHER AGEN-
CIES.— 
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
(I) IN
GENERAL.—A regulated 
entity may submit an application 
under this subparagraph that includes 
an alternative compliance strategy for 
a regulation issued or enforced by a 
financial regulatory agency that is not 
the appropriate financial regulatory 
agency for the regulated entity. 
(II) REQUIREMENTS.—An appli-
cation described in subclause (I) shall 
be subject to the same requirements 
as an application described in clause 
(ii), except that— 
(aa) the regulated entity 
shall submit the application to 
the appropriate financial regu-
latory agency and the financial 
regulatory agency that issued or 
enforces the regulation that is 
the subject of the alternative 
compliance strategy; and 
(bb) the AI test project may 
not take effect unless the appro-
priate financial regulatory agency 
and any other financial regu-
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
(I) review the application; and 
(II) submit to the applicant in 
writing a determination of the agency. 
(ii) APPROVAL.— 
(I) IN GENERAL.—If the appli-
cant shows that it is more likely than 
not that the application meets the re-
quirements for establishing an alter-
native compliance strategy and satis-
fies the standards described in sub-
clauses (II) and (III) of subparagraph 
(A)(ii), the agency shall approve the 
application and notify the applicant in 
writing of— 
(aa) the regulation that is 
the subject of the alternative 
compliance strategy; 
(bb) the terms of the alter-
native compliance strategy for 
the AI test project; 
(cc) the date on which the 
AI test project will terminate; 
(dd) any limitations on the 
size, scope, or growth of the AI 
test project; and 
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
(ee) any additional limita-
tions or conditions on the AI test 
project, as determined by the ap-
propriate 
financial 
regulatory 
agency. 
(II) EFFECT
OF
APPROVAL.— 
With respect to an AI test project, ex-
cept as provided in subclause (III), 
beginning on the date on which an ap-
plication submitted under subpara-
graph (A) is approved and ending on 
the 
date 
described 
in 
subclause 
(I)(cc)— 
(aa) the appropriate finan-
cial regulatory agency may en-
force a regulation described in 
subclause (I)(aa) only in the 
manner set out in the alternative 
compliance strategy described in 
subclause (I)(bb); and 
(bb) a financial regulatory 
agency that is not the appro-
priate financial regulatory agency 
may not enforce a regulation de-
scribed in subclause (I)(aa). 
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
(III) 
ENFORCEMENT
BY
AN-
OTHER
FINANCIAL
REGULATORY 
AGENCY.—With respect to an AI test 
project, a financial regulatory agency 
other than the appropriate financial 
regulatory agency that approves an 
application 
under 
subparagraph 
(A)(iv) may enforce a regulation de-
scribed in subclause (I)(aa) if the al-
ternative 
compliance 
strategy 
de-
scribed in subclause (I)(bb) provides 
for enforcement by such financial reg-
ulatory agency. 
(IV) RULE OF CONSTRUCTION.— 
Nothing in this clause may be con-
strued to limit the authority of a fi-
nancial regulatory agency to take an 
enforcement action against a regu-
lated entity with respect to fraud or 
for engaging in an unsafe or unsound 
practice relating to an AI test project. 
(iii) DENIAL.— 
(I) IN GENERAL.—If an agency 
denies an application submitted under 
subparagraph (A), the agency— 
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
(aa) shall submit to the ap-
plicant a written notice explain-
ing the reason for denial; and 
(bb) may not take an en-
forcement action related to the 
proposed AI test project against 
the applicant earlier than the 
date that is 30 days after the 
date on which the agency submits 
the written notice described in 
item (aa). 
(II) RESUBMITTALS.—Each time 
an application submitted under sub-
paragraph (A) is denied, the regulated 
entity— 
(aa) may submit an amend-
ed application after receiving 
feedback from the agency making 
such denial; and 
(bb) may not resubmit more 
than 2 applications that are sub-
stantially similar to the denied 
application. 
(III) INJUNCTIVE RELIEF.—A fi-
nancial regulatory agency, by and 
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
through its own attorneys, may file a 
civil action in an appropriate United 
States district court to enjoin an AI 
test project if the agency determines 
that the AI test project— 
(aa) presents an immediate 
danger to consumers or investors; 
or 
(bb) presents a risk— 
(AA) to financial mar-
kets; 
(BB) in the case of an 
AI test project engaged in 
by an insured depository in-
stitution or an insured credit 
union, of loss to a Federal 
deposit or share insurance 
fund; 
(CC) of a violation of 
anti-money laundering and 
countering the financing of 
terrorism obligations under 
subchapter II of chapter 53 
of title 31, United States 
Code; or 
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
(DD) to the national 
security 
of 
the 
United 
States. 
(iv) EXTENSION.—If the financial reg-
ulatory agency needs additional time, the 
agency may extend the approval deadline 
by 120 days. After the expiration of the 
120-day extension period, if the agency has 
not made a determination on the applica-
tion, the application will automatically be 
deemed approved and effective. 
(C) DATA SECURITY.—All data supplied by 
sponsors of AI test projects to a financial regu-
latory agency submitted under this section shall 
be stored and maintained in a secure manner 
by the financial regulatory agency, consistent 
with applicable data security standards. 
(D) REGULATIONS.—Not later than 180 
days after the date of enactment of this Act, 
each financial regulatory agency shall promul-
gate regulations that— 
(i) shall be published in the Federal 
Register and provide a 60-day period for 
public notice and comment; and 
(ii) include— 
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS
(I) procedures for modifying the 
AI test projects that are approved by 
the agency; 
(II) consequences for failure to 
comply with the terms of an alter-
native compliance strategy; 
(III) a requirement that an AI 
test project will terminate not earlier 
than 1 year after the AI test project 
is approved; 
(IV) procedures to extend the 
termination date described in sub-
clause (III); 
(V) 
procedures 
for 
confiden-
tiality; and 
(VI) procedures for coordinating 
decisions relating to applications sub-
mitted jointly by multiple regulated 
entities or applications submitted to 
more than one financial regulatory 
agency. 
(b) REPORT.—Not later than 2 years after the date 
of enactment of this Act, and each year for 7 years there-
after, each financial regulatory agency shall submit to the 
Committee on Banking, Housing, and Urban Affairs of 
VerDate Sep 11 2014 
00:02 Aug 01, 2025
Jkt 059200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H4801.IH
H4801
ssavage on LAPJG3WLY3PROD with BILLS