Banking and Finance Law Daily Wrap Up, FINANCIAL TECHNOLOGY—White House issues ‘national framework‘ for AI legislation, (Mar 23, 2026)

By Steven Melendez

The Trump administration proposal aiming to federalize much of AI regulation received mixed feedback from across the political aisle.

The White House released what it called a “national AI legislative framework,” calling on Congress to pursue legislation around several areas related to artificial intelligence governance. The framework aims to set a national policy around the technology and avoid what the White House called “a patchwork of conflicting state laws” that could undermine American innovative ability.

“The Administration recognizes that some Americans feel uncertain about how this transformative technology will affect issues they care about, like their children’s wellbeing or their monthly electricity bill,” according to a White House statement announcing the framework. “These issues, along with other emerging AI policy considerations, require strong Federal leadership to ensure the public’s trust in how AI is developed and used in their daily lives.”

The Trump administration touted the proposal as enabling the United States to benefit in terms of economics, national security, and “human flourishing.” The framework emphasizes seven objectives:

• Protecting children and empowering parents,” including AI platforms taking steps to minimize harm to minors and allow parental controls;

• Safeguarding and strengthening American communities,” including putting in place protections for utility ratepayers potentially facing higher bills related to data centers;

• Respecting intellectual property rights and supporting creators,” including considering legal frameworks around the use of IP and one’s personal likeness in AI;

• Preventing censorship and protecting free speech,” including restricting federal efforts to censor or shape AI output for partisan gain;

• Enabling innovation and ensuring American AI dominance,” including making federal datasets available for AI training and avoiding the creation of a new AI-specific regulatory body;

• Educating Americans and developing an AI-ready workforce,” helping get AI training to U.S. workers; and

• Establishing a federal policy framework, preempting cumbersome state AI laws” by allowing traditional state police powers and zoning rules while not letting states “unduly burden Americans’ use of AI for activity that would be lawful if performed without AI.”

Congressional reaction. Reaction to the proposal from members of Congress and outside advocacy organizations was mixed. House Financial Services Committee Chairman French Hill (R-Ark.) praised the proposed framework for preserving flexibility around AI.

“I commend President Trump for releasing a thoughtful National Legislative Framework for AI that pairs innovation with targeted safeguards,” Hill said. “As Congress moves forward, advancing regulatory sandboxes and a flexible, sectoral based approach will be critical to enabling responsible development. The Committee has long supported a pro-innovation, pro-consumer, pro-investor approach to AI, including through a bipartisan resolution earlier this year.”

At the same time, Sen. Mark Warner (D-Va.), vice chairman of the Senate Select Committee on Intelligence, offered mixed views on the framework, saying it “takes some steps in the right direction but lacks significant substance,” fails to address AI-generated misinformation and disinformation while paying lip service to avoiding partisan bias, and threatens to preempt state regulation of AI. Congress should also do more to address AI and children’s privacy, non-consensual intimate images, and ensuring broad access to the benefits of the technology.

“We also need national security agencies to establish plans to mitigate against national security threats from advanced AI,” Warner said. “But, two years in a row, the Senate Intelligence Committee passed bills that would have required that kind of proactive engagement strategy to get ahead of malicious foreign actors.”

Similarly, Rep. Josh Gottheimer (D-N.J.) said the framework needs more “serious solutions” to issues like workforce and education challenges, deepfakes, and AI security and safety, cautioning against preempting state law without “comprehensive” federal legislation to protect Americans. “While this framework takes steps in the right direction, including child safety and lower energy costs, it is still a half-measure that falls short of what’s necessary for ‘Smart AI’ regulation,” he said, “AI is too important—and too vital to our global competitiveness, economy, jobs, and families—to do anything short of a full-measure.”

Industry reaction. The centrist think tank Third Way also criticized the framework for lacking comprehensive detail. “This framework sidesteps the hard choices—failing to outline enforceable standards, clear accountability measures, or meaningful safeguards,” said Ruth Whittaker, Third Way’s director of technology policy. “If the Administration is serious about addressing both the promise and the risks of AI, we stand ready to move beyond broad principles and cooperate on policies that match the scale and urgency of the challenge.”

And the Consumer Federation of America critiqued the proposal for being too far on the side of big tech firms developing AI technology. “It’s encouraging to see some stated desires to protect people from AI-generated scams and data abuse of minors, but it’s not enough and is outweighed by its pro-AI, anti-person stance on preemption and enforcement,” said Ben Winters, director of AI and data privacy at the CFA. “We need to see money where their mouth is on the protections —more money for consumer protection agencies at both the federal and state levels. So far, they’ve done nothing but cut and hamstring them.”

Similarly, Public Citizen argued the preemption provisions in the framework would eliminate state law protections while bringing little benefit to consumers, relative to Big Tech. But Public Citizen co-president Robert Weissman predicted the framework ultimately wouldn’t pass Congress.

“To be clear, states aren’t keeping up with the risks that Big Tech companies are imposing on Americans (and the world), but they are trying to meet the novel and enormous challenges of the moment,” he said. “Which is exactly why Big Tech wants to shut down their efforts.”

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