H.R. 8671

[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