Foster Draft Would Study Open-Source Tools for Financial Regulation

On November 5, 2026, Rep. Bill Foster released a discussion draft of the Real-Time Regulatory Study Act of 2026, proposing a study of open-source technology for financial oversight. The draft would direct the Federal Reserve Board, coordinating with other financial regulators, to develop, test, and publicly release demonstration software intended to streamline regulatory obligations, reduce compliance costs, and provide regulators with more timely information about financial institutions. The proposal responds to a financial environment shaped by artificial intelligence, around-the-clock payment systems, and the possibility that financial stress can emerge and spread rapidly. Foster’s office also points to evolving AI-related cybersecurity threats and the need to modernize oversight of an increasingly complex financial sector.

The proposed software would cover financial-institution reporting, liquidity management, stress testing, fraud screening, and related regulatory functions. The draft contemplates technical contributions from financial institutions, technology providers, open-source organizations, and researchers. Testing would rely on synthetic or legally permitted historical data—not live customer accounts—and the demonstration would not authorize actual financial transactions or supervisory actions. The stated goal is to explore whether secure, openly maintained tools can improve access to risk-management capabilities, particularly for community banks and credit unions, while helping regulators identify emerging risks and prepare for orderly bank resolutions.

For government contractors and prospective technical contributors, the measure is a policy signal rather than a market-ready acquisition. It identifies potential areas of expertise—such as software development, data handling, regulatory reporting, cybersecurity, liquidity analysis, and risk modeling—but establishes no contracting mechanism, submission process, funding amount, or award. There is no solicitation or deadline for vendors to respond. Companies and research organizations can assess whether their capabilities align with the proposed work, but should avoid treating the discussion draft as an open procurement or assuming that participation would be funded.

If enacted, the draft’s proposed schedule would call for modules to be published within one year, a whole-system test within 18 months, and a final report within two years. These are proposed legislative milestones, not current procurement dates. The draft also does not require financial institutions to adopt the software. The next meaningful indicators for industry would be legislative action and any subsequent Federal Reserve implementation details, including how technical contributions would be invited, reviewed, secured, and supported. Foster summarized the intent as an effort to “explore how secure, open-source technology can help banks and credit unions reduce compliance costs, give regulators real-time insight into emerging risks, and strengthen the stability of our financial system.”

• Lead office: Rep. Bill Foster, top Democrat on the House Financial Institutions Subcommittee, released the discussion draft on November 5, 2026.
• Proposed lead agency: The Federal Reserve Board would develop, test, and publicly release demonstration software in coordination with other financial regulators.
• Potential technical contributors: The draft identifies financial institutions, technology providers, open-source organizations, and researchers as possible sources of technical contributions.
• Proposed software functions: Regulatory reporting, liquidity management, stress testing, fraud screening, and related oversight tools.
• Data and operational limits: Testing would use synthetic or legally permitted historical data, not live customer accounts; the software would not authorize real financial or supervisory actions.
• Possible milestones if enacted: Publish modules within one year, conduct a whole-system test within 18 months, and deliver a final report within two years.
• No present acquisition: The draft provides no appropriation, mandatory adoption, solicitation, contract award, or specified funding amount.
• Industry watchpoint: Monitor legislative developments and Federal Reserve activity for any formal contribution process or funded follow-on work.
• Potential capability areas: Secure open-source development, cybersecurity, regulatory data management, financial reporting, and risk analytics may be relevant if implementation proceeds.
• Policy rationale: Foster’s office links the proposal to AI-driven financial risks, round-the-clock payments, compliance costs, real-time oversight, and financial-system stability.