AI Wealth · Bank Supervision
Rep. Bill Foster Wants the Fed Watching Bank Health in Real Time as AI Speeds Up Stress
Foster, in line to chair the House bank subcommittee, wants the Fed to build open-source reporting software.
· 2 min read
AI-driven services and payments that never close can spread financial stress faster, Foster’s office says, and his draft bill would have the Fed build demonstration software to show regulators how banks stand as conditions change.
The draft’s bet is on cost as much as speed. Standard data formats and shared code could cut the manual work small institutions put into reporting, a Foster spokesperson said, according to a published report. It is a study, not a mandate: any software would be a starting point, not a tool regulators must adopt, the report said.
What would the software do?
The Fed would build working demonstrations and publish the code, with technical help from banks, technology providers, open-source groups and researchers. A one-page summary of the draft names dashboards for regulators, automated reports for banks and credit unions, stress tests run on historical and current data, AI risk monitoring and automated fraud screening.
The demonstrations would touch no live customer accounts, and no real action would follow from their results.
Why would a small bank care?
Reporting to supervisors is manual work at small institutions. Software that fixes the format of regulatory data and handles its transmission could shrink that work, the spokesperson said. If the Fed publishes the code, a community bank or credit union could use it instead of paying to write its own.
Foster’s office did not say what the Fed project would cost or how much reporting expense it could remove. Open code, it argues, also lets many contributors keep the software secure as AI creates new cyber threats.
How far can it go?
Far enough to produce numbers on a fixed clock. The draft calls for an interim report to Congress within 180 days, a systemwide test within 18 months and a final assessment within two years, the report said. The final assessment would cover feasibility, financial stability, cost savings and a plan for keeping the software maintained.
Foster is in line to chair the subcommittee when Democrats take control of Congress in January, a published report said.
What does a bank spend filing by hand what a standard format could send on its own?
