The enactment of the Texas Responsible Artificial Intelligence Governance Act (TRAIGA), effective January 1, 2026, signals a critical shift in the regulatory landscape for Texas financial institutions. While much of the industry’s focus is on AI’s impact on credit scoring and underwriting—areas rightfully subject to intense scrutiny—TRAIGA’s framework extends far beyond decisioning. It creates new governance, transparency, and liability considerations for all AI applications, including those that streamline back-office operations like commercial loan booking. As an AI-powered SaaS provider, we believe understanding this broader scope is the key to both compliance and sustained innovation.

For banks, the new law means that no AI deployment, however secure or internally focused, can be treated as a “black box” exempt from oversight. TRAIGA prohibits intentionally developing or deploying AI systems for harmful purposes, such as unlawful discrimination or the infringement of constitutional rights. Even for a non-decisioning application like commercial loan booking, a bank must prove its AI processes do not lead to biased outcomes or misuse. The law also tightens regulations on biometric data, which means any AI system using biometrics for authentication or fraud prevention must adhere to the new standards, particularly around consent and training data. The message is clear: AI governance is no longer optional; it’s a strategic imperative for every facet of your institution.

Fortunately, TRAIGA rewards proactive governance by offering a “safe harbor” provision for institutions that align their practices with recognized frameworks like the NIST AI Risk Management Framework. This isn’t just about mitigating risk; it’s about building a robust, auditable foundation that showcases your commitment to responsible AI. By adopting proven protocols like thorough testing and documented risk assessments, banks can demonstrate their due diligence, build trust with regulators, and protect their institution from potential liability. In an increasingly complex regulatory environment, partnering with technology providers who understand and help operationalize these standards is the most effective path forward.

At Aeon, we’re committed to building AI tools that balance efficiency with governance. If you’re exploring ways to prepare for TRAIGA, we’d welcome the conversation.

Jeff Livingston, Cofounder