AI in action · Regulation
A House Bill Would Give Regulators Open-Source AI Tools
Rep. Bill Foster's draft bill of November 5, 2026, would have the Fed lead regulators in building open-source software to spot AI-driven stress.
Regulators worry that markets now move faster than they can watch them. A draft bill introduced on Thursday, November 5, 2026, by Representative Bill Foster, an Illinois Democrat and a physicist who leads on AI issues on the House Financial Services Committee, tries to close that gap with code. According to Roll Call, it would require the Federal Reserve to work with other regulators to develop, test and publicly release model software for supervising the financial system.
The scope is broad: banking operations, regulatory reporting, stress testing, anti-money-laundering checks, fraud screening and AI risk monitoring. The stated aim is to let supervisors assess market conditions in real time and respond to cyber and other threats, help them lend to banks in a crisis and wind down failing ones, and cut manual compliance work for small institutions through standard data formats for reporting.
Two design choices stand out. The software would have to be open source and publicly available, and it would be tested on synthetic or legally permitted historical data rather than real customer accounts. Regulators would not be required to adopt it, and they could not take supervisory action on the basis of the study. The bill asks for all software models to be published within a year of enactment and a final report to Congress on feasibility, cost and competition within two years.
"We cannot afford to rely on outdated systems to oversee an increasingly complex financial sector," Foster said. Roll Call framed the bill as a response to financial stress "turbocharged by artificial intelligence and around-the-clock payment systems", the same concern that has led the Office of the Comptroller of the Currency to issue AI guidance for its examiners this month.
A draft bill is a long way from law, and this one would need a sponsor in the Senate and floor time in a crowded session. But Foster is expected to chair the Financial Institutions Subcommittee next year after Democrats won control of the House, which gives the idea a better chance than most. For markets, the point is that the supervisors' toolkit is becoming a political issue in its own right: AI is being proposed not only as a risk to monitor but as the way to monitor it.
Sources: Roll Call — Foster bill would bolster tech use to monitor AI financial risks (Nov 6, 2026)