AFL-CIO Urges Senate to Oppose RFIA

The AFL-CIO has formally urged the Senate Banking Committee to oppose the 182-page Responsible Financial Innovation Act (RFIA), calling the draft a 'facade of regulation' that would weaken consumer and worker protections and increase systemic risk. The federation warns RFIA would allow FDIC-insured banks to directly hold and trade cryptocurrencies, exposing banks and the FDIC’s taxpayer-backed Deposit Insurance Fund to greater losses and paving the way for crypto in 401(k)s and pensions. AFL-CIO officials say RFIA’s tokenization provisions could let issuers evade SEC oversight and create 'shadow' public stocks trading outside securities protections, substantially weakening federal and state enforcement tools. They compared the potential fallout to unregulated derivatives that helped cause the 2008 financial crisis and cautioned that exemptions for NFTs, DePIN and a CFTC‑SEC 'micro-innovation sandbox' would further broaden unmonitored activity. RFIA, led by Sens. Cynthia Lummis and Kirsten Gillibrand and eyed for a possible Senate floor vote, faces growing pushback from labor and some lawmakers unless stronger investor, worker and stability safeguards are added.