A House Democrat wants the Fed to test faster bank health checks

Rep. Bill Foster of Illinois has released a draft bill that would ask the Federal Reserve to test faster, software-based ways to check on the health of banks. He put it out Thursday, Nov. 5. It is an early step in a set of AI bills Democrats plan to push when they take control of Congress in January.

What the bill would do

The draft is called the Real-Time Regulatory Study Act of 2026. It would direct the Federal Reserve Board to work with other financial regulators to build, test and publicly release demonstration software. The software would be open source, which means its code is public and many people can help maintain it.

The goal is to see whether regulators could get real-time information on the health of banks and other financial institutions. The project would also look at making regulatory reporting easier and less costly.

• The Fed would seek help from financial institutions and technology providers.
• It would also ask open-source groups and researchers to contribute.
• The Fed would lead the testing.

Why Foster says it is needed

Foster's office said AI-powered financial services and payments that move at all hours can spread stress through the financial system faster. In the release, Foster said AI is creating new cybersecurity threats and financial risks, so the way officials monitor institutions needs to be modernized.

His office said more timely information could help institutions and regulators respond sooner. It could also improve access to emergency funding and help prepare for the orderly shutdown of a failing bank.

Who it affects

Small banks and credit unions are a big part of the pitch. A Foster spokesperson said the software would provide standard formats for regulatory data, plus tools to manage and send it. That could cut the manual work small institutions spend on reporting.

Shared software could also lower development costs and give community banks and credit unions access to more advanced risk tools. Foster's office also argued that building in security from the start, with many contributors, could strengthen defenses against new AI threats.

What happens next

Foster is the top Democrat on the House Financial Institutions Subcommittee and is in line to chair it next year. That would give him a platform for the idea. Other Democrats have their own AI plans, including safety testing of AI models and protecting consumers from higher electricity costs tied to data centers.

The path is not clear. President Donald Trump opposes mandatory AI rules, which could blunt the broader push. This is also only a discussion draft. The material does not say when a formal bill might be introduced or what the project would cost.