,,ii  #aai? ,,congress  #a/ ,session    
,s4 #bebh  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,july #bi1 #bjbe ,mr4  
,r\nds 7= himself1 ,mr4 ,he9ri*1 ,mr4   
,tillis1 & ,mr4 ,kim7 introduc$ ! foll[+
 bill2 :i* 0 read twice & ref]r$ to !   
,committee on ,bank+1 ,h\s+1 & ,urban   
,affairs  ,a ,,bill  ,to e/abli% ,,ai   
,innovation ,labs 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  ,def9itions  7#a7  
,,ai te/ project  ,! t]m ,,ai te/       
project means a f9ancial product or     
s]vice t--  7,a7 falls "u ! jurisdiction
 ( a f9ancial regulatory ag5cy2  7,b7   
makes sub/antial use ( artificial       
intellig5ce2 &  7,c7 is1 or may be1     
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$]al ,deposit  
,insurance ,act 7#ab ,u4,s4,c4 #ahac71 )
 respect to an in/itution describ$ 9    
subsection 7q7 ( t section2  7,b7 !     
,securities & ,ex*ange ,commission1 )   
respect to an in/itution n describ$ 9   
subp>agraph 7,a7 t is--  7i7 any brok]  
or deal] t is regi/]$ ) ! ,commission "u
 ! ,securities ,ex*ange ,act ( #aicd    
7#ae ,u4,s4,c4 #gh;a et seq472  7ii7 any
 inve/m5t company t is regi/]$ ) !      
,commission "u ! ,inve/m5t ,company ,act
 ( #aidj 7#ae ,u4,s4,c4 #hj;a-#a et     
seq472  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 seq472  7iv7 any cle>+ ag5cy
 regi/]$ ) ! ,commission "u !           
,securities ,ex*ange ,act ( #aicd 7#ae  
,u4,s4,c4 #gh;a et seq472  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]1 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 does n h 
an appropriate f9ancial regulatory ag5cy
 "u subp>agraph 7,a71 7,b71 7,d71 or    
7,e7 ( ?is p>agraph2  7,d7 ! ,national  
,cr$it ,union ,adm9i/ration1 ) respect  
to an insur$ cr$it union1 z def9$ 9     
section #aja ( ! ,f$]al ,cr$it ,union   
,act 7#ab ,u4,s4,c4 #ageb72 &  7,e7 !   
,f$]al ,h\s+ ,f9ance ,ag5cy1 ) respect  
to-- 7i7 a ,f$]al ,home ,loan ,bank2    
7ii7 ! ,f$]al ,home ,loan ,bank ,sy/em2 
7iii7 ! ,f$]al ,national ,mortgage      
,association2 &  7iv7 ! ,f$]al ,home    

,loan ,mortgage ,corporation4  7#c7     
,artificial intellig5ce2 ai ,! t]ms     
artificial intellig5ce & ,,ai h ! mean+ 
giv5 ! t]m artificial intellig5ce 9     
section #ejjb ( ! ,national ,artificial 
,intellig5ce ,initiative ,act ( #bjbj   
7#ae ,u4,s4,c4 #idja74  7#d7            
,commission  ,! t]m ,commission means ! 
,securities & ,ex*ange ,commission4     
7#e7  ,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      
#cjf72 &  7,h7 ! ,dodd-,frank ,wall     

,/reet ,re=m & ,consum] ,protection ,act
 7,public ,law #aaa-bjc2 #abd ,/at4     
#acgf74  7#f7  ,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    
section #ajjb ( ! ,consum] ,f9ancial    
,protection ,act ( #bjaj 7#ab ,u4,s4,c4 
#edha72 &  7iii7 includes ! (f] or sale 
( any security subject to ! ,f$]al      
securities laws2 &  7,c7 does n include 
! bus9ess ( insurance4  7#g7 ,f9ancial  
regulatory ag5cy ,! t]m f9ancial        
regulatory ag5cy means--  7,a7 ! ,bo>d (
 ,gov]nors ( ! ,f$]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#h7 ,regulat$   
entity ,! t]m regulat$ entity means an  
entity regulat$ by any f9ancial         
regulatory ag5cy4  #c4  ,use (          
artificial intellig5ce by regulat$      
f9ancial entities  7a7  ,,ai innovation 
labs  7#a7  ,e/abli%m5t  ,ea* f9ancial  
regulatory ag5cy %all e/abli%1 or       
id5tify an (fice1 division1 or dep>tm5t 
( ! ag5cy t %all s]ve z1 an ,,ai        
,innovation ,lab to enable regulat$     
entities to exp]im5t ) ,,ai te/ projects
 )\t unnecess>y or unduly burd5some     
regulation or expectation ( en=cem5t    
actions1 pursuant to ! approval ( an    
application "u p>agraph 7#b74  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/ project  
?r\gh ! ,,ai ,innovation ,lab e/abli%$  
or id5tifi$ "u p>agraph 7#a74  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
 t ! regulat$ entity reque/s to be waiv$
 or modifi$2 &  7bb7 proposes an        
alt]native me?od = ! regulat$ entity to 
comply ) ! regulation1 includ+ an       
explanation z to :y ! alt]native me?od  
is ess5tial to ! op]ation ( ! entity &  
h[ ! regulat$ entity w\ld effectively   
manage risks associat$ ) ! ,,ai te/     
project2  7,,iii7 an explanation ( h[ "u
 ! /rategy describ$ 9 subclause 7,,ii71 
! ,,ai te/ project--  7aa7 w\ld s]ve !  
public int]e/1 improve consum] or       
inve/or access to a f9ancial product or 
s]vice1 or promote consum] or inve/or   

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 &  
an explanation :y su* t]m9ation date    
w\ld be appropriate2  7,v7 propos$      
limitations on ! size1 scope1 & gr[? ( !
 ,,ai te/ project2  7,,vi7 a detail$    
bus9ess plan2 &  7,,vii7 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 ( 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$ or 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$ or  
en=ces ! 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$ or en=ces ! regulation 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 7iv71 n lat] ?an #abj  
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 & satisfies ! /&>ds  
describ$ 9 subclauses 7,,ii7 & 7,,iii7 (
 subp>agraph 7,a77ii71 ! ag5cy %all     
approve ! application & notify !        
applicant 9 writ+ (--  7aa7 ! regulation

 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  ,) respect  
to an ,,ai te/ project1 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 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 describ$ 9     
subclause 7,i77aa74  7,,iii7  ,en=cem5t 

by ano!r f9ancial regulatory ag5cy  ,)  
respect to an ,,ai te/ project1 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 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 regulat$ entity 
) respect to fraud or = engag+ 9 an     
unsafe or uns\nd practice 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 = d5ial2 &  7bb7 may n take an   
en=cem5t action relat$ to ! propos$ ,,ai
 te/ project 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--  7aa7 may submit an   
am5d$ application aft] receiv+ fe$back f
 ! ag5cy mak+ su* d5ial2 &  7bb7 may n  
resubmit m ?an #b applications t are    
sub/antially simil> to ! d5i$           
application4  7,,iii7  ,injunctive      
relief  ,a f9ancial regulatory ag5cy1 by
 & ?r\gh its own attorneys1 may file a  
civil action 9 an appropriate ,unit$    
,/ates di/rict c\rt to enjo9 an ,,ai te/
 project if ! ag5cy det]m9es t ! ,,ai   
te/ project--  7aa7 pres5ts an imm$iate 
dang] to consum]s or inve/ors2 or  7bb7 
pres5ts a risk-- 7,,aa7 to f9ancial     
m>kets2  7,,bb7 9 ! case ( an ,,ai te/  
project engag$ 9 by an insur$ depository
 in/itution or an insur$ cr$it union1 ( 
loss to a ,f$]al deposit or %>e         
insurance fund2  7,,cc7 ( a violation ( 
anti-money laund]+ & c\nt]+ ! f9anc+ (  
t]rorism obligations "u sub*apt] ,,ii ( 

*apt] #ec ( title #ca1 ,unit$ ,/ates    
,code2 or  7,,dd7 to ! national security
 ( ! ,unit$ ,/ates4  7iv7 ,ext5sion ,if 
! f9ancial regulatory ag5cy ne$s        
additional "t1 ! ag5cy may ext5d !      
approval deadl9e by #abj days4 ,aft] !  
expiration ( ! #abj-;day ext5sion p]iod1
 if ! ag5cy has n made a det]m9ation on 
! application1 ! application w          
automatically be deem$ approv$ &        
effective4  7,c7  ,data security  ,all  
data suppli$ by sponsors ( ,,ai te/     
projects to a f9ancial regulatory ag5cy 
submitt$ "u ?is section %all be /or$ &  
ma9ta9$ 9 a secure mann] by ! f9ancial  
regulatory ag5cy1 consi/5t ) applicable 
data security /&>ds4  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$]al ,regi/] & provide a #fj-;day    
p]iod = public notice & comm5t2 &  7ii7 
include-- 7,i7 proc$ures = modify+ !    
,,ai te/ projects t are approv$ by !    

ag5cy2  7,,ii7 consequ5ces = failure to 
comply ) ! t]ms ( an alt]native         
compliance /rategy2  7,,iii7 a          
requirem5t t an ,,ai te/ project w      
t]m9ate n e>li] ?an #a ye> aft] ! ,,ai  
te/ project is 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  7b7  ,report
  ,n lat] ?an #b ye>s aft] ! date (     
enactm5t ( ?is ,act1 & ea* ye> = #g ye>s
 !reaft]1 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 ,a  
report "u ?is subsection may n include !
 names ( p>ticipat+ entities or any     
propriet>y or confid5tial bus9ess       

in=mation4 ,a report "u ?is subsection  
%all include aggregat$ f9d+s1 tr5ds1 &  
lessons le>n$ f ! ,,ai te/ projects4    
7c7  ,rule ( con/ruction  ,no?+ 9 ?is   
section may be con/ru$ to limit !       
au?ority ( a f9ancial regulatory ag5cy  
to take an en=cem5t action aga9/ a      
regulat$ entity ) respect to fraud      
relat+ to an ,,ai te/ project4