[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8671 Reported in House (RH)]
<DOC>
Union Calendar No. 612
119th CONGRESS
2d Session
H. R. 8671
[Report No. 119-704]
To require the Federal banking agencies to conduct a study on the use
of advanced technologies in fraud detection and prevention, with
particular attention to community financial institutions, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 7, 2026
Mr. Flood introduced the following bill; which was referred to the
Committee on Financial Services
June 18, 2026
Additional sponsor: Ms. Pettersen
June 18, 2026
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed
in italic]
[For text of introduced bill, see copy of bill as introduced on May 7,
2026]
_______________________________________________________________________
A BILL
To require the Federal banking agencies to conduct a study on the use
of advanced technologies in fraud detection and prevention, with
particular attention to community financial institutions, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Bank Fraud Technology Advancement
Act of 2026''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Advanced fraud detection technology.--The term
``advanced fraud detection technology'' means emerging
technologies used to detect, prevent, or mitigate financial
fraud and scams, including artificial intelligence, machine
learning, predictive analytics, behavioral biometrics, network
analytics, data fusion tools, distributed ledger-based
monitoring tools, and blockchain tracing tools.
(2) Artificial intelligence.--The term ``artificial
intelligence'' has the meaning given that term in section 5002
of the National Artificial Intelligence Initiative Act of 2020
(15 U.S.C. 9401).
(3) Credit union.--The term ``credit union'' has the
meaning given the term ``insured credit union'' in section 101
of the Federal Credit Union Act (12 U.S.C. 1752).
(4) Federal banking agency.--The term ``Federal banking
agency''--
(A) has the meaning given such term in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813); and
(B) means the National Credit Union Administration.
(5) Insured depository institution.--The term ``insured
depository institution'' has the meaning given such term in
section 3 of the Federal Deposit Insurance Act (12 U.S.C.
1813).
(6) Machine learning.--The term ``machine learning'' has
the meaning given that term in section 5002 of the National
Artificial Intelligence Initiative Act of 2020 (15 U.S.C.
9401).
SEC. 3. STUDY ON ADVANCED TECHNOLOGIES IN FRAUD AND SCAM DETECTION AND
PREVENTION.
(a) In General.--The Federal banking agencies, in consultation with
the Secretary of the Treasury, the Financial Crimes Enforcement
Network, the Federal Trade Commission, the Bureau of Consumer Financial
Protection, the Federal Communications Commission, and other
appropriate Federal and State government agencies, including
appropriate law enforcement agencies, shall jointly conduct a
comprehensive study on the use of advanced fraud detection technology
by insured depository institutions and credit unions.
(b) Required Elements.--The study required under subsection (a)
shall evaluate the following:
(1) Current use and effectiveness.--The current use and
effectiveness of advanced fraud detection technologies,
including-
(A) the extent to which insured depository
institutions and credit unions of varying asset sizes
deploy advanced fraud detection technology;
(B) measurable outcomes relating to fraud
detection, prevention, loss reduction, loss mitigation,
privacy, and consumer protection;
(C) barriers to adoption and considerations of
interoperability, data access, liability, error rates,
and regulation; and
(D) how various fraud detection technologies differ
in use, effectiveness, costs, benefits, and
considerations under subparagraphs (A) through (C).
(2) Community financial institution access.--Community
financial institution (that is either an insured depository
institution or credit union) access to advanced fraud detection
technology, including--
(A) challenges faced by community financial
institutions in accessing or deploying advanced fraud
detection tools, including unique challenges faced by
various types of community financial institutions;
(B) whether economies of scale disadvantage smaller
community financial institutions in general, or certain
types of smaller financial institutions;
(C) options to facilitate shared services, utility
models, managed-service providers, or consortium-based
fraud detection platforms; and
(D) recommendations to ensure regulatory guidance
is appropriately tailored to avoid discouraging
adoption by smaller community financial institutions.
(3) Artificial intelligence and machine learning.--
Artificial intelligence and machine learning, including--
(A) the use by insured depository institutions and
credit unions of artificial intelligence and machine
learning models, applications, and tools in detecting
fraud patterns, anomalies, synthetic identity fraud,
and real-time payment fraud;
(B) governance frameworks used by insured
depository institutions and credit unions to manage
fraud model risk, explainability, and validation; and
(C) steps Federal banking agencies can take in
coordination with other relevant government agencies
and the private sector to ensure access by insured
depository institutions and credit unions, including
community financial institutions and their third-party
vendors, to such models, applications, and tools.
(4) Information sharing and public-private partnerships.--
Information sharing and public-private partnerships,
including--
(A) the effectiveness of existing information-
sharing frameworks;
(B) whether expanded public-private partnerships or
centralized fraud utilities would enhance detection
capabilities;
(C) the feasibility of a voluntary fraud analytics
consortium accessible to community financial
institutions; and
(D) privacy, data protection, and cybersecurity
considerations associated with expanded data sharing.
(5) Payments system risks.--Payments system risk,
including--
(A) fraud risks associated with electronic funds
transfers and checks; and
(B) whether advanced analytics can reduce fraud
while preserving settlement finality and payment system
stability.
(6) Regulatory and supervisory considerations.--Regulatory
and supervisory considerations, including--
(A) what benefits and risks arise from existing
supervisory expectations with respect to innovations in
fraud detection and prevention, including whether
existing supervisory expectations create barriers to
innovation while maintaining relevant safeguards;
(B) the need for interagency guidance, regulatory
clarity, or safe harbors to support technology adoption
in a manner that promotes fraud detection and
prevention consistent with consumer protection,
privacy, safety and soundness, and national security;
(C) opportunities to harmonize expectations across
Federal banking agencies; and
(D) whether additional training for Federal banking
agencies staff is necessary to promote effective
regulation and supervision of financial institutions'
use of advanced fraud detection technology, especially
for community financial institutions.
(c) Report and Recommendations.--
(1) Report.--Not later than 18 months after the date of
enactment of this Act, the Federal banking agencies shall issue
a report to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate containing all findings and
determinations made in carrying out the study required under
this section, and make such report publicly available.
(2) Classified annex.--A report under paragraph (1) may
include a classified annex, if applicable, provided to the
committees.
(3) Recommendations.--The report required under paragraph
(1) shall include legislative, regulatory, or supervisory
recommendations that promote fraud detection and prevention
consistent with consumer protection, safety and soundness, and
national security, which may include--
(A) proposals to support shared fraud detection
utilities or consortium-based analytics platforms;
(B) guidance or safe harbors to encourage
artificial intelligence use in fraud prevention;
(C) pilot programs tailored to community financial
institutions; and
(D) recommendations to strengthen public-private
information sharing consistent with privacy and civil
liberties protections.
SEC. 4. COMMUNITY FINANCIAL INSTITUTION FRAUD TECHNOLOGY PILOT PROGRAM.
(a) In General.--Not later than 1 year after submission of the
report required under section 3(c), the Federal banking agencies may
jointly establish a voluntary pilot program to facilitate community
financial institution access for insured depository institutions and
credit unions with less than $10,000,000,000 in total consolidated
assets to advanced fraud detection tools.
(b) Program Features.--The pilot program described in subsection
(a) may include--
(1) pooled procurement or shared services models;
(2) model validation assistance or technical support;
(3) standardized vendor risk management templates;
(4) regulatory clarity regarding model governance
expectations; and
(5) collaboration with the Department of the Treasury and
law enforcement to provide anonymized fraud typology data
feeds.
(c) Sunset and Report.--
(1) Sunset.--Any pilot program established under this
section shall expire not later than 3 years after submission of
the report required under section 3(c).
(2) Report.--Not later than 6 months after the expiration
of all pilot programs established under this section, the
Federal banking agencies shall issue a report to the Committee
on Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate,
and make such report available to the public, containing--
(A) all findings and determinations made by the
Federal banking agencies in carrying out any pilot
program established under this section; and
(B) any legislative, regulatory, or other
recommendations the Federal banking agencies may have
based on such findings and determinations.
(3) Classified annex.--A report under paragraph (2) may
include a classified annex, if applicable, provided to the
committees.
Union Calendar No. 612
119th CONGRESS
2d Session
H. R. 8671
[Report No. 119-704]
_______________________________________________________________________
A BILL
To require the Federal banking agencies to conduct a study on the use
of advanced technologies in fraud detection and prevention, with
particular attention to community financial institutions, and for other
purposes.
_______________________________________________________________________
June 18, 2026
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed