CBA had significant wins during the 2025 legislative session, and unfortunately, reforming the artificial intelligence (AI) regulation bill (SB24-205) was not one of them.

CBA defeated an attempt by credit unions to have the ability to purchase banks, and we defeated a bill to restrict interchange and prohibit interchange from being charged on the tax or tip portion of any transaction. The lobby team brought the same fierce advocacy to the AI fight, but the AI fight isn’t just about banking; it impacts every business in the state.

The 2024 AI bill was introduced late in the session. The intent of the bill is to prevent algorithmic discrimination. All business groups, including CBA, were asked not to amend the bill because the governor was going to veto the bill. The governor did not veto the 2024 bill but promised that the bill would be amended/corrected in the 2025 legislative session. During the interim, a task force met to discuss revisions to the bill. The task force met even during the early months of the session, and a subcommittee of the task force worked to craft SB25-318, which was finally introduced late in the session.

The 2024 bill required both developers and deployers (all banks are deployers) to test and audit AI to ensure there is no algorithmic discrimination. The bill gives the attorney general authority to enforce the law. Customers must be notified of AI use and given the opportunity to opt-out. Violations of the law are a deceptive trade practice. The law goes into effect in February of 2026.

The bill, introduced in 2025, extended the effective date to January 2027. It had significant changes in definitions and notification requirements. For example, a consequential decision was amended to include denial of goods or services. This change would have required that every debit card, credit card and checking account transaction where AI is used for fraud prevention be subject to the law — requiring a notice for every transaction. And offering customers the opportunity to not only appeal but to opt out.

We lobbied for a Gramm Leach Bliley (GLB) exemption, exempting entities that are subject to the GLB. Every activity a bank takes is examined to ensure there is no discrimination. It should not matter what tool we use — the end product must be discrimination-free.

Issues we lobbied for include:

• GLB exemption.
• Exempting AI used for fraud prevention.
• AI used for regulatory compliance.
• Limiting the bill to consumers.
• Limiting the bill to lending activities.
• Ensuring notices could be sent on a monthly statement.

The hearing for the 2025 bill was held on May 5. The sponsor was frustrated and killed his own bill. That action meant the 2024 bill remains in effect as of February 2026.

We expect this issue to be included in the call for a special session. The legislature will have to return to address budget issues, and the AI bill should be included during that special session.

We will keep you posted as we continue to work on this issue.