House Financial Services Committee Announces Bipartisan AI Working Group

Jan 17, 2024Congressional Legislation, FinTech, News

Last week, House Financial Services Committee (HFSC) Chairman Patrick McHenry (R-N.C) and Ranking Member Maxine Waters (D-Calif.) announced the formation of the Committee’s bipartisan Working Group on Artificial Intelligence (AI) that will investigate how technology impacts the development of new products and services, compliance, fraud prevention, supervisory and regulatory tools, and the financial services workforce.

“The Working Group will explore this technology’s potential, specifically its adoption in our financial system,” said McHenry in a press release. “It will also find ways to leverage artificial intelligence to foster a more inclusive financial system, while establishing the U.S. as the world leader in AI development and terms of use.”

The group will be led by the chairman and ranking member of the Digital Assets, Financial Technology and Inclusion Subcommittee, Representatives French Hill (R-Ark.) and Stephen Lynch (D-Mass.). The Hill noted that it is a continuation of the work conducted by the Task Force on AI in previous Congresses, and it will examine how current regulation addresses the benefits and risks of AI.

In the press release, Waters said that a major risk of AI is that it could embed historic inequities in the financial services and housing markets, and that she wants “to ensure that this technology does not advance beyond our ability to regulate it, worsen existing inequities, and that consumers are properly protected from harm or abuse.”

In October, President Biden issued an executive order to promote safe AI development, requiring AI firms to produce “standards, tools and tests” to ensure their systems are trustworthy. In December, the Financial Stability Oversight Council (FSOC) identified AI use in financial services as a vulnerability in the financial system.

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