AI Frontier Institute

PROFESSIONAL AI OVERSIGHT ACT

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Illinois SB3601, introduced February 5, 2026 by Sen. Steve Stadelman, creates the Professional AI Oversight Act and amends the Consumer Fraud and Deceptive Business Practices Act, both taking effect January 1, 2027. Under Section 10, any licensee regulated by the Department of Financial and Professional Regulation (DFPR) must prominently disclose to paying clients when they are interacting with artificial intelligence. That disclosure must be made verbally at the start of an oral exchange and in writing before a written exchange, and must identify the specific purpose of the AI being used. Section 10(c) clarifies that using AI does not relieve a licensee of any other requirements of their regulated occupation. 'Regulated occupation' is defined in Section 5 and excludes certain licensed mental-health professionals covered under the Wellness and Oversight for Psychological Resources Act. Section 15 grants DFPR rulemaking authority. Section 20 establishes civil penalties not to exceed $2,500 per violation, assessed after a hearing under Section 2105-100 of the Civil Administrative Code of Illinois, based on degree of harm and circumstances; violators must pay within 60 days of the Department's order, which constitutes an enforceable judgment. DFPR may also investigate actual, alleged, or suspected violations. Separately, new Section 2MMMM of the Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/2MMMM) makes it an unlawful trade practice for any person to deploy AI in commercial interactions without disclosing, when asked, that the user is interacting with AI and not a human.

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