What does EO 14365 say about AI in banking?

What are the key points of EO 14365?

• Sec. 2: policy is 'to sustain and enhance the United States' global AI dominance through a minimally burdensome national policy framework for AI'.
• Sec. 1 criticizes State-by-State regulation and cites 'a new Colorado law banning "algorithmic discrimination"' as an example of a State law that 'may even force AI models to produce false results'.
• Sec. 3: within 30 days the Attorney General must establish an AI Litigation Task Force 'whose sole responsibility shall be to challenge State AI laws' inconsistent with the Sec. 2 policy, on interstate-commerce, preemption or other grounds.
• Sec. 4: within 90 days the Commerce Secretary must publish an evaluation of existing State AI laws identifying 'onerous' laws and laws to refer to the Task Force, including laws requiring AI models to alter truthful outputs or compelling disclosures that may violate the First Amendment.
• Sec. 5: the Commerce Secretary, through NTIA, must issue a BEAD Policy Notice making States with onerous AI laws ineligible for non-deployment funds to the maximum extent allowed by law (Sec. 5(a)), and agencies must assess conditioning discretionary grants on States not enacting conflicting AI laws (Sec. 5(b)).
• Sec. 6: within 90 days of publication of the Sec. 4 identification, the FCC Chairman must initiate a proceeding on whether to adopt a Federal reporting and disclosure standard for AI models that preempts conflicting State laws.
• Sec. 7: within 90 days the FTC Chairman must issue a policy statement on how the FTC Act's ban on unfair or deceptive practices (15 U.S.C. 45) applies to AI models and when State laws requiring altered truthful outputs are preempted.
• Sec. 8: the AI advisers must prepare a legislative recommendation for a uniform Federal framework that preempts conflicting State AI laws but does not propose preempting otherwise lawful State laws on child safety, AI compute and data center infrastructure, State procurement and use of AI, and other topics to be determined.

What did EO 14365 change for banks?

EO 14365 moved federal AI policy from deregulation of federal rules to active opposition to state AI laws. For banks the consequence is uncertainty about state AI obligations, not relief from federal ones: the Justice Department moved against Colorado's AI Act in April 2026, the FTC proposed a policy statement in July 2026 saying such laws may be impliedly preempted, and the White House asked Congress in March 2026 to preempt burdensome state laws. Colorado has since replaced its law with SB 26-189, effective January 1, 2027.

What does EO 14365 require of banks?

Executive Order 14365, 'Ensuring a National Policy Framework for Artificial Intelligence', requires nothing of banks. It tasks federal agencies: the Attorney General to create an AI Litigation Task Force to challenge State AI laws (Sec. 3, within 30 days), the Commerce Secretary to evaluate and publish a list of onerous State AI laws (Sec. 4, within 90 days), NTIA to condition BEAD non-deployment funds (Sec. 5), the FCC to open a proceeding on a preemptive disclosure standard (Sec. 6), the FTC to issue a policy statement on State laws that require altered AI outputs (Sec. 7), and the White House advisers to prepare a preemption legislative recommendation (Sec. 8). Section 9(c) says the order creates no right or benefit enforceable against the United States or any other person. Its relevance to a bank is that it targets State AI laws, such as Colorado's law on algorithmic discrimination in consequential decisions, that can reach lending.

EO 14365 is the instrument through which the administration moved from federal deregulation (EO 14179, the AI Action Plan) to challenging state law. The operative text is a series of directions to agencies with deadlines, and a call on Congress for a national standard. The order says an effective framework must come 'with the Congress' and does not claim to preempt state law on its own. Courts, not the order, will decide whether any state AI law is preempted or unconstitutional.

The follow-through so far is visible but partial. The Justice Department created the Task Force on January 9, 2026 and moved on April 24, 2026 to intervene in xAI's challenge to Colorado SB 24-205; the White House published legislative recommendations in March 2026 asking Congress to preempt state AI laws that impose undue burdens while preserving states' laws of general applicability on fraud and consumer protection; the FTC proposed a policy statement on July 1, 2026. We could not confirm from a primary source that Commerce has published the Sec. 4 evaluation, and we have not found a published FCC proceeding under Sec. 6, which depends on it. Colorado's SB 24-205 was replaced by SB 26-189 on May 14, 2026 before it ever took effect, so the DOJ filing predates the law that will now apply.

For a bank, the order does not relax any federal duty. Fair lending, adverse action notices, model risk management and third-party risk continue to apply under federal law. What it affects is state AI law: a multi-state lender should treat state AI statutes as live until a court or Congress says otherwise, while recognizing that Colorado's transparency regime and similar state rules are the ones under federal challenge.

WHAT THIS MEANS IN PRACTICE

• Keep complying with state AI laws that apply to you, including Colorado SB 26-189 from January 1, 2027; the order does not suspend any state law.
• Maintain federal fair-lending and adverse-action controls regardless of the preemption campaign; the order does not touch ECOA, FCRA or supervisory model-risk guidance.
• Track four things: the FTC's final policy statement, any Commerce list of onerous state laws, the DOJ litigation against Colorado, and congressional action on preemption.
• If you rely on a vendor's state-by-state compliance representations, ask how the vendor treats laws named as targets by the administration.
• Do not treat the BEAD funding condition or the FCC proceeding as bank obligations; they bind federal agencies and States, not lenders.