AI Act of 2024: Congress Explores Artificial Intelligence’s Role in Finance and Housing

AI Act of 2024 – U.S. Lawmakers Introduce Bill to Study AI’s Impact on Financial and Housing Sectors

AI Act of 2024 – U.S. lawmakers have introduced a groundbreaking bill that mandates federal regulators to conduct studies on the impact of artificial intelligence (AI) in the financial services and housing industries. The bill, introduced by Congresswoman Maxine Waters, directs key federal financial regulators to analyze both the current and potential benefits and risks AI presents in these sectors. The bill is co-sponsored by House Financial Services Committee Chair Patrick McHenry, with both lawmakers emphasizing the growing presence of AI in these industries.

Key Provisions of the Waters-Sponsored AI Act of 2024

The bill, known as the AI Act of 2024, requires major regulatory bodies such as the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) to provide detailed reports on how AI is being used by banks to detect and prevent issues like money laundering, cybercrime, and fraud. Waters stressed that AI is already influencing critical areas like mortgage lending and credit scoring, highlighting the need for a comprehensive regulatory framework to manage AI’s integration into these sectors. The bill aims to ensure that AI technologies are being utilized effectively and ethically.

AI’s Expanding Influence in Market Surveillance and Tenant Screening

According to the bill’s language, AI-powered research is increasingly used for purposes like market surveillance and tenant screening. McHenry further explained that these measures are essential to keep pace with AI’s evolving role in the financial landscape. He stated, “These bills are a small, but critical, step forward to empower the financial system to realize the numerous benefits artificial intelligence can offer for consumers, firms, and regulators.”

Reforming Privacy Laws in the Age of AI

One aspect of the bill includes a recommendation for the House Financial Services Committee to consider potential reforms to existing privacy laws. As AI-driven data use becomes more prevalent, lawmakers are concerned that current privacy regulations may need to be updated to ensure the responsible handling of personal and financial data.

Bipartisan Support for AI Oversight Initiatives

The AI Act of 2024 builds on the Bipartisan AI Working Group, established in January 2024 by the House Financial Services Committee. The group includes Republican members like French Hill and Mike Flood, and Democratic members like Stephen Lynch and Ayanna Pressley. This bipartisan effort underscores the importance of developing a unified approach to AI regulation.

Strengthening U.S. Leadership in AI Development

Both Waters and McHenry have expressed their commitment to ensuring that the United States remains a global leader in the development and responsible use of AI. McHenry has emphasized the importance of balancing innovation with consumer protection and regulatory oversight.

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