A bill reintroduced by Sen. Mike Rounds, R-S.D., creates a regulatory AI sandbox that lets financial institutions test AI tools without fear of sanctions — if they meet transparency, safety and national security requirements. The reintroduction of the “Unleashing AI Innovation in Financial Services Act,” co-sponsored with Sen. Martin Heinrich, D-N.M., would let financial institutions test AI-enabled products and services without immediate risk of enforcement action, as long as they meet transparency, consumer protection and national security requirements. “By creating a safe space for experimentation, we can help firms innovate and regulators learn without applying outdated rules that don’t fit today’s technology,” Rounds said. The bill was originally introduced in 2024. If enacted, S.4951 would direct financial regulators — including the Securities and Exchange Commission, Consumer Financial Protection Bureau and the Federal Reserve — to evaluate and potentially waive or modify existing rules for approved AI test projects. Agencies would have 90 days to approve or deny applications, with automatic approval if no decision is made by the deadline.