,,ii  #aah? ,,congress  #b;d ,session   
,s4 #diea  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,augu/ #a1 #bjbd,mr4   
,r\nds 7= himself & ,mr4 ,he9ri*7       
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on       
,bank+1 ,h\s+1 & ,urban ,affairs  ,a    
,,bill  ,to provide = regulatory s&boxes
 t p]mit c]ta9 p]sons to exp]im5t )     
artificial intellig5ce )\t expectation (
 en=cem5t actions4  #a4 ,%ort title ,?is
 ,act may be cit$ z ! ,unlea%+ ,,ai     
,innovation 9 ,f9ancial ,s]vices ,act4  
#b4 ,use ( artificial intellig5ce by    
regulat$ f9ancial entities  7a7         
,def9itions ,9 ?is section3 7#a7 ,,ai   
te/ project ,! t]m ,,ai te/ project     
means a f9ancial product or s]vice t    
falls "u ! jurisdiction ( a f9ancial    
regulatory ag5cy-- 7,a7 sub/antially    
uses artificial intellig5ce2 &  7,b7 is 
or may be subject to a ,f$]al regulation
 or ,f$]al /atute4  7#b7 ,appropriate   
f9ancial regulatory ag5cy ,! t]m        
appropriate f9ancial regulatory ag5cy   

means-- 7,a7 ! appropriate ,f$]al bank+ 
ag5cy1 z def9$ 9 section #c ( ! ,f$]al  
,deposit ,insurance ,act 7#ab ,u4,s4,c4 
#ahac71 ) respect to regulat$ entities  
describ$ 9 subsection 7q7 ( t section2  
7,b7 ! ,securities & ,ex*ange           
,commission1 ) respect to-- 7i7 any     
brok] or deal] t is regi/]$ ) !         
,commission "u ! ,securities ,ex*ange   
,act ( #aicd 7#ae ,u4,s4,c4 #gh;a et    
seq471 ) respect to ! activities ( !    
brok] or deal] t require ! brok] or     
deal] to be regi/]$ "u t ,act2  7ii7 any
 inve/m5t company t is regi/]$ ) !      
,commission "u ! ,inve/m5t ,company ,act
 ( #aidj 7#ae ,u4,s4,c4 #hj;a-#a et     
seq471 ) respect to ! activities ( !    
inve/m5t company t require ! inve/m5t   
company to be regi/]$ "u t ,act2  7iii7 
any inve/m5t advis] t is regi/]$ ) !    
,commission "u ! ,inve/m5t ,advis]s ,act
 ( #aidj 7#ae ,u4,s4,c4 #hj;b-#a et     
seq471 ) respect to ! inve/m5t advisory 
activities ( su* company & activities t 
are incid5tal to su* advisory           

activities2  7iv7 any cle>+ ag5cy       
regi/]$ ) ! ,commission "u ! ,securities
 ,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4   
#gh;a et seq471 ) respect to !          
activities ( ! cle>+ ag5cy t require !  
ag5cy to be regi/]$ "u su* ,act2  7v7   
any nationally recogniz$ /ati/ical rat+ 
organization regi/]$ ) ! ,commission "u 
! ,securities ,ex*ange ,act ( #aicd 7#ae
 ,u4,s4,c4 #gh;a et seq472  7vi7 any    
transf] ag5t regi/]$ ) ! ,commission "u 
! ,securities ,ex*ange ,act ( #aicd 7#ae
 ,u4,s4,c4 #gh;a et seq472  7vii7 any   
ex*ange regi/]$ z a national securities 
ex*ange ) ! ,commission "u ! ,securities
 ,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4   
#gh;a et seq472  7viii7 any national    
securities association regi/]$ ) !      
,commission "u ! ,securities ,ex*ange   
,act ( #aicd 7#ae ,u4,s4,c4 #gh;a et    
seq472  7ix7 any securities in=mation   
processor regi/]$ ) ! ,commission "u !  
,securities ,ex*ange ,act ( #aicd 7#ae  
,u4,s4,c4 #gh;a et seq472  7x7 !        
,municipal ,securities ,rulemak+ ,bo>d  

e/abli%$ "u ! ,securities ,ex*ange ,act 
( #aicd 7#ae ,u4,s4,c4 #gh;a et seq472  
7xi7 ! ,public ,company ,acc\nt+        
,ov]sight ,bo>d e/abli%$ "u !           
,s>banes-,oxley ,act ( #bjjb 7#ae       
,u4,s4,c4 #gbaa et seq472  7xii7 !      
,securities ,inve/or ,protection        
,corporation e/abli%$ "u ! ,securities  
,inve/or ,protection ,act ( #aigj 7#ae  
,u4,s4,c4 #gh;aaa et seq472 &  7xiii7   
any security-bas$ swap execution        
facility1 security-bas$ swap data       
repository1 security-bas$ swap deal] or 
major security-bas$ swap p>ticipant     
regi/]$ ) ! ,commission "u ! ,securities
 ,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4   
#gh;a et seq471 ) respect to !          
security-bas$ swap activities ( ! p]son 
t require su* p]son to be regi/]$ "u su*
 ,act2  7,c7 ! ,bureau ( ,consum]       
,f9ancial ,protection1 ) respect to a   
cov]$ p]son1 z def9$ 9 section #ajjb ( !
 ,consum] ,f9ancial ,protection ,act (  
#bjaj 7#ab ,u4,s4,c4 #edha71 t is n     
describ$ 9 subp>agraph 7,a71 7,b71 7,c71

 7,e71 or 7,f7 ( ?is p>agraph2  7,d7 !  
,national ,cr$it ,union ,adm9i/ration1 )
 respect to an insur$ cr$it union2 &    
7,e7 ! ,f$]al ,h\s+ ,f9ance ,ag5cy1 )   
respect to ,f$]al ,home ,loan ,banks or 
! ,f$]al ,home ,loan ,bank ,sy/em1 & )  
respect to ! ,f$]al ,national ,mortgage 
,association or ! ,f$]al ,home ,loan    
,mortgage ,corporation4  7#c7           
,artificial intellig5ce ,! t]m          
artificial intellig5ce has ! mean+ giv5 
! t]m 9 section #ejjb ( ! ,national     
,artificial ,intellig5ce ,initiative    
,act ( #bjbj 7#ae ,u4,s4,c4 #idja74     
7#d7 ,f$]al securities laws ,! t]m      
,f$]al securities laws means-- 7,a7 !   
,securities ,act ( #aicc 7#ae ,u4,s4,c4 
#gg;a et seq472  7,b7 ! ,securities     
,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4    
#gh;a et seq472  7,c7 ! ,s>banes-,oxley 
,act ( #bjjb 7#ae ,u4,s4,c4 #gbja et    
seq472  7,d7 ! ,tru/ ,ind5ture ,act (   
#aici 7#ae ,u4,s4,c4 #gg;aaa et seq472  
7,e7 ! ,inve/m5t ,company ,act ( #aidj  
7#ae ,u4,s4,c4 #hj;a-#a et seq472  7,f7 

! ,inve/m5t ,advis]s ,act ( #aidj 7#ae  
,u4,s4,c4 #hj;b-#a et seq472 &  7,g7 !  
,jump/>t ,our ,bus9ess ,/>tup ,act      
7,public ,law #aab-ajf2 #abf ,/at4      
#cjf74  7#e7 ,f9ancial product or s]vice
 ,! t]m f9ancial product or s]vice--    
7,a7 has ! mean+ giv5 ! t]m 9 section   
#ajjb ( ! ,consum] ,f9ancial ,protection
 ,act ( #bjaj 7#ab ,u4,s4,c4 #edha72    
7,b7 includes-- 7i7 activities t are    
f9ancial 9 nature1 z def9$ 9 section    
#d7k77#d7 ( ! ,bank ,hold+ ,company ,act
 ( #aief 7#ab ,u4,s4,c4 #ahdc7k77#d772  
7ii7 any f9ancial product or s]vice     
provid$ by a p]son regulat$ by !        
,commission1 z def9$ 9 #ajjb ( !        
,consum] ,f9ancial ,protection ,act (   
#bjaj 7#ab ,u4,s4,c4 #edha72 &  7iii7   
includes ! (f] or sale ( any security   
subject to ! ,f$]al securities laws2 &  
7,c7 does n include ! bus9ess (         
insurance4  7#f7 ,f9ancial regulatory   
ag5cy ,! t]m f9ancial regulatory ag5cy  
means-- 7,a7 ! ,bo>d ( ,gov]nors ( !    
,f$]al ,res]ve ,sy/em2  7,b7 ! ,f$]al   

,deposit ,insurance ,corporation2  7,c7 
! ,(fice ( ! ,comptroll] ( ! ,curr5cy2  
7,d7 ! ,securities & ,ex*ange           
,commission2  7,e7 ! ,bureau ( ,consum] 
,f9ancial ,protection2  7,f7 ! ,national
 ,cr$it ,union ,adm9i/ration2 &  7,g7 ! 
,f$]al ,h\s+ ,f9ance ,ag5cy4  7#g7      
,regulat$ entity ,! t]m regulat$ entity 
means an entity regulat$ by any f9ancial
 regulatory ag5cy4  7b7 ,regulatory     
s&boxes  7#a7 ,e/abli%m5t ,ea* f9ancial 
regulatory ag5cy %all e/abli% a         
regulatory s&box t all[s regulat$       
entities to exp]im5t ) ,,ai te/ projects
 )\t unnecess>y or unduly burd5some     
regulation or expectation ( retroactive 
en=cem5t actions4  7#b7 ,applications   
7,a7 ,submission  7i7 ,9 g5]al ,a       
regulat$ entity may submit to !         
appropriate f9ancial regulatory ag5cy an
 application1 on a =m det]m9$ by !      
appropriate f9ancial regulatory ag5cy1  
to engage 9 an ,,ai te/ project4  7ii7  
,cont5ts ,an application submitt$ "u    
clause 7i7 %all include-- 7,i7 a        

description ( ! ,,ai te/ project propos$
 to be c>ri$ out by ! regulat$ entity2  
7,,ii7 an alt]native compliance /rategy 
t-- 7aa7 id5tifies a regulation issu$ by
 ! appropriate f9ancial regulatory ag5cy
 or a ,f$]al /atute en=c$ by !          
appropriate f9ancial regulatory ag5cy t 
! regulat$ entity reque/s to be waiv$ or
 modifi$2 &  7bb7 proposes an alt]native
 me?od = ! regulat$ entity to comply ) !
 regulation or /atute1 includ+ an       
explanation z to :y ! alt]native me?od  
is ess5tial to ! op]ation ( ! entity2   
7,,iii7 a demon/ration t1 "u ! /rategy  
describ$ 9 subclause 7,i71 ! ,,ai te/   
project-- 7aa7 w\ld s]ve ! public       
int]e/1 improve consum] access to a     
f9ancial product or s]vice1 or promote  
consum] protection2  7bb7 w\ld enhance  
effici5cy or op]ations1 fo/] innovation 
or competitiv5ess1 improve risk         
managem5t & security1 or enhance        
regulatory compliance2  7cc7 w\ld n     
pres5t a sy/emic risk to ! f9ancial     
sy/em ( ! ,unit$ ,/ates2  7dd7 is       

consi/5t ) ! purposes ( ! anti-money    
laund]+ & c\nt]+ ! f9anc+ ( t]rorism    
obligations "u sub*apt] ,,ii ( *apt] #ec
 ( title #ca1 ,unit$ ,/ates ,code2 &    
7ee7 w\ld n pres5t a national security  
risk to ! ,unit$ ,/ates2  7,,iv7 a      
propos$ date on :i* ! ,,ai te/ project  
w\ld t]m9ate & expla9 :y su* t]m9ation  
date w\ld be appropriate2  7,v7 propos$ 
limitations on ! size1 scope1 & gr[? ( !
 ,,ai te/ project2 &  7,,vi7 an e/imate 
( ! economic impact ( ! ,,ai te/ project
 if approv$4  7iii7 ,jo9t applications  
,two or m regulat$ entities may submit a
 jo9t application to ! same f9ancial    
regulatory ag5cy "u clause 7i74  7iv7   
,regulations & /atutes ( o!r ag5cies    
7,i7 ,9 g5]al ,a regulat$ entity may    
submit an application "u ?is subp>agraph
 t includes an alt]native compliance    
/rategy = a regulation issu$ by or a    
,f$]al /atute en=c$ by a f9ancial       
regulatory ag5cy t is n ! appropriate   
f9ancial regulatory ag5cy = ! regulat$  
entity4  7,,ii7 ,requirem5ts ,an        

application describ$ 9 subclause 7,i7   
%all be subject to ! same requirem5ts z 
an application describ$ 9 clause 7ii71  
except t-- 7aa7 ! regulat$ entity %all  
submit ! application to ! appropriate   
f9ancial regulatory ag5cy & ! f9ancial  
regulatory ag5cy t issu$ ! regulation or
 en=ces ! /atute or regulation t is !   
subject ( ! alt]native compliance       
/rategy2 &  7bb7 ! ,,ai te/ project may 
n take effect unless ! appropriate      
f9ancial regulatory ag5cy & any o!r     
f9ancial regulatory ag5cy t issu$ !     
regulation or en=ces ! /atute t is !    
subject ( ! alt]native compliance       
/rategy jo9tly approve ! application us+
 ! process describ$ 9 subp>agraph 7,b74 
7v7 ,notice ,a regulat$ entity t is     
regulat$ or sup]vis$ by m ?an #a        
f9ancial regulatory ag5cy %all provide  
notice ( any application submitt$ to !  
appropriate f9ancial regulatory ag5cy "u
 ?is section to ea* f9ancial regulatory 
ag5cy by :i* x is regulat$ or sup]vis$ n
 lat] ?an #e bus9ess days aft] ! entity 

submits ! application to ! appropriate  
f9ancial regulatory ag5cy4  7,b7 ,ag5cy 
review  7i7 ,9 g5]al ,except z provid$ 9
 clause 7v71 n lat] ?an #ij days aft] ! 
date on :i* an application is submitt$  
to ! appropriate f9ancial regulatory    
ag5cy "u subp>agraph 7,a71 ! appropriate
 f9ancial regulatory ag5cy %all-- 7,i7  
review ! application2 &  7,,ii7 submit  
to ! applicant 9 writ+ a det]m9ation ( !
 ag5cy4  7ii7 ,approval  7,i7 ,9 g5]al  
,if ! applicant %[s t x is m likely ?an 
n t ! application meets ! requirem5ts = 
e/abli%+ an alt]native compliance       
/rategy & meets ! requirem5ts describ$ 9
 subp>agraph 7,a77ii77,,ii71 ! ag5cy    
%all approve ! application & notify !   
applicant 9 writ+ (-- 7aa7 ! regulation 
or ,f$]al /atute t is ! subject ( !     
alt]native compliance /rategy2  7bb7 !  
t]ms ( ! alt]native compliance /rategy =
 ! ,,ai te/ project2  7cc7 ! date on :i*
 ! ,,ai te/ project w t]m9ate2  7dd7 any
 limitations on ! size1 scope1 or gr[? (
 ! ,,ai te/ project2 &  7ee7 any        

additional limitations or conditions on 
! ,,ai te/ project1 z det]m9$ by !      
appropriate f9ancial regulatory ag5cy4  
7,,ii7 ,effect ( approval ,except z     
provid$ 9 subclause 7,,iii71 beg9n+ on !
 date on :i* an application submitt$ "u 
subp>agraph 7,a7 is approv$ & end+ on ! 
date describ$ 9 subclause 7,i77cc7--    
7aa7 ! appropriate f9ancial regulatory  
ag5cy may en=ce a regulation or ,f$]al  
/atute describ$ 9 subclause 7,i77aa7    
only 9 ! mann] set out 9 ! alt]native   
compliance /rategy describ$ 9 subclause 
7,i77bb72 &  7bb7 a f9ancial regulatory 
ag5cy t is n ! appropriate f9ancial     
regulatory ag5cy may n en=ce a          
regulation or ,f$]al /atute describ$ 9  
subclause 7,i77aa7 ) respect to !       
conduct ( ! ,,ai te/ project by !       
regulat$ entity4  7,,iii7 ,en=cem5t by  
ano!r f9ancial regulatory ag5cy ,a      
f9ancial regulatory ag5cy o!r ?an !     
appropriate f9ancial regulatory ag5cy t 
approves an application "u subp>agraph  
7,a77iv7 may en=ce a regulation or      

,f$]al /atute describ$ 9 subclause      
7,i77aa7 if ! alt]native compliance     
/rategy describ$ 9 subclause 7,i77bb7   
provides = en=cem5t by su* f9ancial     
regulatory ag5cy4  7,,iv7 ,rule (       
con/ruction ,no?+ 9 ?is clause may be   
con/ru$ to limit ! au?ority ( a f9ancial
 regulatory ag5cy to take an en=cem5t   
action aga9/ a regulatory entity )      
respect to fraud relat+ to an ,,ai te/  
project4  7iii7 ,d5ial  7,i7 ,9 g5]al   
,if an ag5cy d5ies an application       
submitt$ "u subp>agraph 7,a71 ! ag5cy-- 
7aa7 %all submit to ! applicant a writt5
 notice expla9+ ! reason = d5ial1       
includ+ evid5ce t ! applicant did n     
satisfy ! requirem5ts = e/abli%+ an     
alt]native compliance /rategy & !       
basel9e us$ by ! ag5cy to measure !     
likely economic consequ5ces ( reject+ ! 
application2 &  7bb7 may n take an      
en=cem5t action aga9/ ! applicant e>li] 
?an ! date t is #cj days aft] ! date on 
:i* ! ag5cy submits ! writt5 notice     
describ$ 9 item 7aa74  7,,ii7           

,resubmittals ,ea* "t an application    
submitt$ "u subp>agraph 7,a7 is d5i$1 ! 
regulat$ entity may submit ano!r        
application if ! application is n       
sub/antially simil> to ! "o d5i$4       
7,,iii7 ,injunctive relief ,if a        
f9ancial regulatory ag5cy det]m9es an   
,,ai te/ project pres5ts an imm$iate    
dang] to consum]s or pres5ts a risk to  
f9ancial m>kets1 ! ag5cy may file a     
civil action 9 an appropriate c\rt seek+
 to enjo9 su* project4  7,,iv7 ,rule (  
con/ruction ,no?+ 9 ?is clause may be   
con/ru$ to limit ! au?ority ( a f9ancial
 regulatory ag5cy to take an en=cem5t   
action aga9/ an applicant ) respect to  
fraud relat+ to ! ,,ai te/ project4     
7iv7 ,ext5sion ,if ! f9ancial regulatory
 ag5cy ne$s additional "t1 ! ag5cy may  
vote to ext5d ! application deadl9e by  
#ij days4 ,aft] ! expiration ( !        
#ij-;day p]iod1 if ! ag5cy has n made a 
det]m9ation on ! application1 !         
application w automatically be deem$    
approv$ & effective4  7,c7 ,data        

security ,all data suppli$ by sponsors (
 ,,ai te/ projects submitt$ "u ?is      
section %all be /or$ 9 a secure mann]4  
7,d7 ,regulations ,n lat] ?an #ahj days 
aft] ! date ( enactm5t ( ?is ,act1 ea*  
f9ancial regulatory ag5cy %all          
promulgate regulations t-- 7i7 %all be  
publi%$ 9 ! ,f$]al ,regi/] & provide a  
#de-;day p]iod = public notice & comm5t2
  7ii7 include-- 7,i7 proc$ures =       
modify+ ! ,,ai te/ projects t are       
approv$ by ! ag5cy2  7,,ii7 consequ5ces 
= failure to comply ) set t]ms2  7,,iii7
 t]m9ation dates n e>li] ?an #a ye> aft]
 ! date on :i* ,,ai te/ projects are    
approv$2  7,,iv7 proc$ures to ext5d !   
t]m9ation date describ$ 9 subclause     
7,,iii72  7,v7 proc$ures =              
confid5tiality2 &  7,,vi7 proc$ures =   
coord9at+ decisions relat+ to           
applications submitt$ jo9tly by multiple
 regulat$ entities or applications      
submitt$ to m ?an "o f9ancial regulatory
 ag5cy4  7c7 ,report ,ea* f9ancial      
regulatory ag5cy %all submit to !       

,committee on ,bank+1 ,h\s+1 & ,urban   
,affairs ( ! ,s5ate & ! ,committee on   
,f9ancial ,s]vices ( ! ,h\se (          
,repres5tatives an annual report on !   
outcomes ( ,,ai te/ projects4  7d7      
,regulations ,aft] approv+ n few] ?an #a
 ,,ai te/ project1 an ag5cy may         
promulgate regulations1 aft] provid+ a  
notice & an opportunity = public comm5t1
 o!r ,,ai activities or products t      
qualify z ,,ai te/ projects4