Overview
- Rep. Bill Foster released a discussion draft on Thursday that would direct the Federal Reserve to develop, test and publicly release open-source demonstration software for real-time regulatory reporting and monitoring.
- The draft names specific modules for demonstration, including regulatory dashboards, automated bank and credit union reports, stress-testing with historical and current data, AI risk monitoring, and automated fraud and anti-money-laundering screening.
- The proposal requires testing with synthetic or legally permitted historical data, bars use of live customer accounts, forbids supervisory or financial actions during the study, and leaves adoption of the software voluntary.
- It sets firm deadlines: publish modules and draft security plans within one year, deliver an interim report to Congress within 180 days, run a systemwide test within 18 months, and provide a final assessment within two years.
- Foster frames the effort as a response to faster AI-driven threats and 24/7 payment flows and says shared open-source tools could ease reporting burdens for small banks while giving regulators faster tools to provide crisis funding or wind down failing firms.