S. 2528 — Unleashing AI Innovation in Financial Services Act

This section establishes definitions in the Federal Credit Union Act for eight terms related to artificial intelligence in financial regulation: (1) "AI test project," meaning a financial product or service under a financial regulatory agency's jurisdiction that makes substantial use of artificial intelligence and is or may be subject to federal regulation; (2) "appropriate financial regulatory agency," including the National Credit Union Administration with respect to insured credit unions; (3) "artificial intelligence" and "AI," as defined in the National Artificial Intelligence Initiative Act of 2020; (4) "Commission," meaning the Securities and Exchange Commission; (5) "Federal securities laws," listing specified securities statutes; (6) "financial product or service," incorporating definitions from the Consumer Financial Protection Act and Bank Holding Company Act (excluding insurance); (7) "financial regulatory agency," listing the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Securities and Exchange Commission, Bureau of Consumer Financial Protection, National Credit Union Administration, and Federal Housing Finance Agency; and (8) "regulated entity," meaning an entity regulated by any financial regulatory agency.

This section requires each financial regulatory agency to establish or designate an AI Innovation Lab to enable regulated entities to experiment with AI test projects under alternative compliance strategies that waive or modify specified agency regulations, without enforcement actions during the approved project term. Regulated entities may submit applications—including project descriptions, proposed regulatory waivers or alternatives with risk management plans, public interest and risk assessments (e.g., no systemic or national security risks, consistency with AML/CFT requirements), termination dates, size/scope limitations, business plans, and economic impact estimates—which the appropriate agency must review and determine within 120 days. Approval, required if the application is more likely than not to meet criteria, specifies the waived regulation, alternative terms, termination date, and limitations; during the project, enforcement follows only the alternative strategy, and other agencies may not enforce the waived regulation (joint approval required for other agencies' rules). Multi-agency regulated entities must notify other regulators within 5 business days of submission; joint applications by multiple entities are permitted.