News: representative Maxine Waters (Calif.), the top Democrat on the House Financial Services Committee, will today release a bill to improve transparency of artificial intelligence products used in financial services.
The invoice, that you can read here, would direct several federal regulators to study the use and origins of AI products used by financial companies. These agencies include the Federal Reserve, the Federal Deposit Insurance Corp., the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission.
The interinstitutional study required by Waters’ bill would direct regulators to establish recommendations for new standards and definitions for AI policy.
Another major axis establishes how regulators and companies could “label” the use of AI products, including the origin of data used to train financial services AI and evaluate how that data is used.
After this study is released, Waters’ bill would direct each agency to determine whether its existing authorities require regulated companies to submit additional information to the government about how AI models are trained. This could include “the delineation and ratios between synthetic and authentic data in the training of artificial intelligence models” and their data sources, according to the text of the bill.
The waters were working with the chairman of the House Financial Services Committee Patrick McHenry (RN.C.) for some time on AI legislation, which began with an AI task force launched before the Covid-19 pandemic. This particular bill does not yet have bipartisan support, but we don’t think this is the last piece of AI in banking legislation we’ll see before the end of the 118th Congress.
Water legislation plays in one of Democrats’ longest-standing concerns about the use of artificial intelligence in the world of financial services – the fear that AI trained on faulty, biased or outdated data could make it easier for lenders to take poor lending decisions on a massive scale and locking out disadvantaged Americans. outside the financial system.
We are not optimistic that this bill can pass during the remainder of the lame duck session — there just isn’t much time left on the calendar — but lawmakers will meet next week to discuss it and other bills during a hearing on “the future of finance” scheduled for December 4.