Rep. Foster Unveils Discussion Draft of Legislation to Modernize Financial Regulatory Reporting and Strengthen Oversight of the Financial System

Washington, DC – Today, Congressman Bill Foster, top Democrat on the House Financial Institutions Subcommittee, released the Real-Time Regulatory Study Act. 

Financial services driven by artificial intelligence and round-the-clock payments systems may contribute to and rapidly spread financial stress. As the financial system accelerates, real-time information and automated tools can help institutions and regulators respond faster, improve access to liquidity, and better prepare for orderly bank resolutions. Meanwhile, advances in AI are creating new cybersecurity threats. Through enhanced collective maintenance and security built in from the start, open-source software can provide stronger protection against cyber threats. Model open-source software also has the potential to lower development and reporting costs for community banks and credit unions and expand their access to advanced risk-management capabilities.

The Real-Time Regulatory Study Act directs the Federal Reserve Board, in coordination with other financial regulators, to develop, test, and publicly release open-source demonstration software to evaluate how technology can streamline regulatory obligations, reduce compliance costs, and provide regulators with real-time information on the condition of financial institutions nationwide. The Federal Reserve would seek technical contributions from financial institutions, technology providers, open-source organizations, and researchers.

“With advances in AI creating new cybersecurity threats and financial risks, it's more important than ever that we modernize the way we monitor the health of our financial institutions. My Real-Time Regulatory Study Act would explore how secure, open-source technology can help banks and credit unions reduce compliance costs, give regulators real-time insight into emerging risks, and strengthen the stability of our financial system. We cannot afford to rely on outdated systems to oversee an increasingly complex financial sector,” said Rep. Bill Foster.