Bank Fraud Technology Advancement Act of 2026
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This bill would require federal agencies to study bank fraud detection technology and could create a pilot program for smaller lenders.
What it does
This bill would require federal banking agencies to conduct a joint study and issue a public report on the use of advanced fraud detection technology, including artificial intelligence and machine learning, within the banking system. The study would evaluate the effectiveness of these tools and examine the level of access community financial institutions have to such technology. Additionally, the bill proposes to allow these agencies to establish a temporary pilot program designed to help small banks and credit unions access advanced fraud detection tools.
Who is affected
This bill affects federal banking agencies, specifically the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Federal Reserve Board, and the National Credit Union Administration. It also impacts insured depository institutions and credit unions, with a particular focus on community financial institutions and small-scale lenders. These entities would be subject to a study on fraud detection technology and may participate in a temporary pilot program to access advanced tools.
Key provisions
- Study on advanced fraud detection technology. Directs federal banking agencies to jointly study the use and effectiveness of advanced fraud detection tools among insured depository institutions and credit unions.
- Evaluation of artificial intelligence and machine learning. Requires the study to specifically examine the governance and application of artificial intelligence and machine learning in detecting bank fraud.
- Assessment of community financial institution access. Mandates an evaluation of how community financial institutions access fraud detection technology and requires agencies to report findings and legislative recommendations to Congress.
- Pilot program for small financial institutions. Authorizes federal banking agencies to establish a temporary pilot program to help small insured depository institutions and credit unions access advanced fraud detection tools.
Fiscal impact
Not applicable: No CBO cost estimate available
Effective dates
Not applicable: Official Summary does not address effective dates
Relationship to existing law
The bill directs federal banking agencies, including the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, to evaluate fraud detection technologies used by insured depository institutions and credit unions. It also authorizes these agencies to establish a pilot program to assist community financial institutions in accessing advanced fraud detection tools.
Stated purpose
The bill aims to evaluate and improve the use of advanced fraud detection technology, including artificial intelligence and machine learning, within the banking system. It specifically focuses on assessing the effectiveness of these tools and expanding access for community financial institutions and small credit unions through research and a potential pilot program.