Banking and Finance Law Daily Wrap Up, FINANCIAL TECHNOLOGY—AFL-CIO is concerned about proposed ‘Responsible Financial Innovation Act’, (Oct 8, 2025)

By Thomas G. Wolfe, J.D.

“As drafted, this bill will enable the crypto industry to operate in wider and deeper ways in our financial system without sufficient oversight,” the organization asserts.

Anticipating that the “Responsible Financial Innovation Act” will soon come before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) has transmitted a letter to committee leaders expressing the organization’s concerns about the proposed legislation. In its Oct. 6, 2025, letter to Senate Banking Committee Chairman Tim Scott (R-S.C.) and Ranking Member Elizabeth Warren (D-Mass.), the AFL-CIO urges the leaders to oppose the Responsible Financial Innovation Act, maintaining that the bill’s treatment of crypto assets “poses risks to both retirement funds and to the overall financial stability of the U.S. economy.” Moreover, as presently drafted, the measure “will enable the crypto industry to operate in wider and deeper ways in our financial system without sufficient oversight or meaningful safeguards,” the organization asserts.

According to the Responsible Financial Innovation Act, the bill aims to “clearly draw the line between digital asset securities and commodities, to impose disclosure requirements for certain transactions involving ancillary assets, and for other purposes.”

Additional letter highlights. While the letter communicates that the AFL-CIO supports efforts to “update regulatory regimes to better protect workers” from the volatility of cryptocurrency assets, the organization views the Responsible Financial Innovation Act as “increasing systemic risk” instead. Among other things the letter communicates that:

• the bill “codifies the tokenization of securities and assets such that private companies have a pathway to create a shadow public stock outside of SEC oversight;”

• while most pensions do not carry crypto assets “because of the risks associated with them,” the bill “provides the facade of regulation that may make cryptocurrency and associated assets more mainstream in portfolios”—thereby allowing the “proliferation of assets that investors will wrongly perceive as safe;”

• financial instability would increase if the bill is enacted in its present form; and

• the AFL-CIO seeks to ensure that “hard earned retirement benefits are not endangered by risky assets” and that the U.S. financial system remains stable “instead of creating a casino for crypto billionaires to make more profits.”

Companies: American Federation of Labor and Congress of Industrial Organizations

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