Financial Services Committee Advances FSOC Bill on Federal Reserve Supervision of Nonbank SIFIs
On September 16, 2025, the House Financial Services Committee advanced a bill from Rep. Bill Foster (D-Ill.) that would require the Financial Stability Oversight Council (FSOC) to consider alternative approaches before determining that a nonbank systemically important financial institution (SIFI) should be supervised by the Federal Reserve. In particular, the bill provides that prior to voting on a determination, FSOC must first find that a different action by FSOC, the company’s financial regulator, or the company itself is “impracticable or insufficient to mitigate the threat that the company could pose to the financial stability of the United States.”
Staff Contact - Sean McKennaNAIC Update
The VM-22 Subgroup adopted changes to the 2027 Valuation Manual regarding the VM-22 Standard Projection Amount (SPA). The changes:
- Require an attribution analysis in certain situations
- Clarify that if an Additional Standard Projection Amount (ASPA) is indicated, the company should strengthen assumptions and margins until an ASPA is no longer indicated, unless the company can show that the material drivers of the difference are due to supportable company assumptions
- Reiterate that the SPA is not a safe harbor
The subgroup still has additional items to consider for the 2027 Valuation Manual; all changes will be reflected in a single document, which will be sent to the Life Actuarial Task Force (LATF) for approval. In addition, the subgroup exposed three “Day 2” items for 60 days relating to aggregation, settlement options, and deposit-type contracts. Finally, the subgroup plans to discuss retroactive application of VM-22 at a regulator-only meeting on October 8.
Staff Contact - Sean McKennaAI Activity
California Assemblywoman Rebecca Bauer-Kahan (D) has pulled AB 1018 “to allow for additional stakeholder engagement and productive conversations with” Governor Newsom’s office. The bill would have imposed new requirements on developers and deployers of automated decision systems used to make consequential decisions, including with respect to insurance.
In other AI news, on September 18, 2025, the House Financial Services Committee’s Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence held a hearing titled “Unlocking the Next Generation of AI in the U.S. Financial System for Consumers, Businesses, and Competitiveness.” The subcommittee heard from representatives from the MIT-IBM Watson AI Lab, the Center for Information Policy Leadership, Gattaca Horizons, and the Brookings Institution.
The hearing focused on the current state of AI in the financial services sector and what can be done to promote development while protecting consumers from financial harm and potential fraud. The speakers expressed encouragement for the development of a federal governance framework that allows for the safe use of AI without hampering innovation. They acknowledged the benefits of AI in the financial services sector but expressed concerns that it creates new avenues for threat actors to commit fraud or otherwise harm individuals and companies. Additionally, the speakers and subcommittee members expressed interest in the development of an AI regulatory sandbox program to assist in the development and testing of AI models, including references to Singapore’s AI sandbox program (which works in a similar manner).
Staff Contact - Sean McKennaPrivacy Updates
The California Privacy Protection Agency (CPPA) Board will host a public meeting on September 26, 2025. The meeting will include discussion and possible action on (1) proposed amendments to current regulations on data broker registration requirements; (2) adoption of regulations implementing the Delete Request and Opt-Out Platform requirements; and (3) adjustments to the CPPA’s data broker registration and access fees.
The California legislature passed the California Opt Me Out Act (AB 566), requiring browsers to support opt-out preference signals to allow consumers to limit the sale and sharing of their information in a single step. Furthermore, AB 566 requires browsers to include a “set it once, protect everywhere function” that allows a consumer to enable the browser to send an opt-out preference signal to businesses with which the consumer interacts through the browser. The bill now awaits signature by Governor Newsom.
In other privacy news, the Georgetown Institute for Technology Law and Policy has published a data broker toolkit aimed at helping U.S. enforcers, practitioners, policymakers, and reporters understand data broker laws and enforcement gaps. The toolkit focuses on data broker cases and the associated remedies and enforcement proceedings. It is organized into five sections:
- Data Brokers Overview
- Case Overview
- Remedies Overview
- Sources for Case Data
- Complaint & Order Table