Bill · S. 5358· Senate(119-S-5358)
FAIRR Act
- Introduced
- 8/6/2026
- Last activity
- 8/6/2026 — Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- Sponsored by
- Mark Warner
- Cosponsors
- - 0 - 1
- Introduced
- In Committee
What this bill would do
The FAIRR Act aims to amend the Financial Stability Act of 2010 to address risks posed by artificial intelligence in the financial sector. It directs the Financial Stability Oversight Council to coordinate with member agencies to identify threats such as market manipulation via false representations and gaps in liability for unauthorized transactions. The bill requires a report to Congress within 180 days detailing these threats, regulatory gaps, and potential uses of AI in supervision. Additionally, it mandates scenario-based exercises to test defenses against market disruptions. Finally, it empowers the SEC to require covered persons to implement governance measures for their AI systems.
Yes· 3 of 5
Does this better protect the country from computer attacks?+6
The bill focuses on identifying and mitigating cybersecurity-related threats posed by AI in financial markets.
Does this give the federal government more power?+5
The bill expands the regulatory and oversight authority of federal agencies like the SEC and FHFA regarding AI.
Does this give people more protection from unfair business practices?+5
The bill enhances consumer protections by addressing liability gaps for unauthorized transactions caused by AI agents.
The opposite
Would business owners be better off under this?-3
The bill imposes new regulatory and compliance costs on financial service providers and third-party contractors.
Who it would affect, and how
Potential Positive Impacts for People
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Identifying Market Threats: The bill directs the Council to identify threats like the use of AI to create false representations or likenesses to manipulate financial markets (Section 2(a)(2)(A)). This could help protect investors from deception.
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Addressing Liability Gaps: It seeks to identify gaps in laws regarding liability for financial institutions and consumers when unauthorized transactions are initiated by AI agents (Section 2(a)(2)(B)). This could provide more clarity and protection for consumers.
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Testing Financial Defenses: The bill requires scenario-based exercises to test how well the system can defend against disruptions caused by AI (Section 2(f)(1)). This could help prevent large-scale financial instability.
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Enhancing AI Governance in Securities: The SEC would be required to ensure that regulated persons have specific governance measures for their AI systems, including human oversight and monitoring (Section 5(a)(2)(A)). This could lead to more responsible use of technology in the markets.
Potential Negative Impacts for People
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Regulatory Burdens on Financial Entities: The bill requires the SEC to impose specific requirements on "covered persons"—including brokers, dealers, and issuers—to ensure their policies and controls address AI use (Section 5(a)(2)(A)). This may create new compliance obligations for these entities.
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Increased Oversight of Service Providers: Under the Federal Housing Finance Agency, certain activities performed by service providers would be subject to regulation and examination as if they were performed by the regulated entity itself (Section 4(1)). This could increase the regulatory reach over third-party contractors.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Governance And Ideology
- Increases Federal Power+5Improves Government Transparency+3
- National Security And Foreign Policy
- Improves Cybersecurity Defense+6
- Economy And Finance
- Improves Consumer Protection+5
- Education And Technology
- Increases Big Tech Regulation+4
- Demographic And Interest Groups
- Good For Business Owners-3
- 8/6/2026
- Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- 1 Cosponsor added.
- Introduced in Senate
John KennedyRepublican · Louisiana