New legislation aimed at increasing transparency around artificial intelligence-powered products in financial services was introduced on Wednesday.
Representative Maxine Waters (D-Calif.), the top Democrat on the House Financial Services Committee, introduced this as follows: Responsible AI Disclosure Act of 2024, The law directs several federal regulators to investigate the uses and origins of AI products used in financial services. This includes identifying best practices such as sources of data and how to use it, model design and functionality, and model compliance with federal laws and regulations.
Under the bill, federal regulators would be required to submit reports of their findings to the House Financial Services Committee and the Senate Banking, Housing, and Urban Affairs Committee within six months of the bill’s passage. The report will also include recommendations for regulators on whether additional federal action should be taken to regulate AI models.
“This bill would require relevant banking and market regulators to examine and consider current data labeling practices for tools, products, and services that use AI, and to make recommendations to Congress based on these practices. It is mandatory.” press release said. “By labeling the origin of data used to train AI systems, consumers can understand how AI is being used to make specific decisions, the quality of that data, and how data is used in the process. Recognize how it will be used.”
Following this study, agencies will be required to provide detailed information on how regulated organizations and vendors use data to train AI models, as well as the “overview and ratio of synthetic and real data in training artificial intelligence.” They will be directed to decide whether they need to provide additional information to the government. intelligence model. ”
Federal regulators include the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the National Credit Union Administration, and the Securities and Exchange Commission.
This bill builds on Representative Waters’ track record of working on AI legislation with House Financial Services Committee Chairman Patrick McHenry, RN.C., resulting in the committee’s bipartisan A working group on artificial intelligence has been established. announced In January.
“This bill follows Congressman Waters’ long-standing effort to create the first-ever Congressional Task Force on AI to research AI in our nation’s housing and financial services systems,” the release states. are. “This task force has held nearly a dozen hearings to examine the benefits and risks of AI, and we believe this technology will advance beyond our ability to regulate, exacerbate existing inequalities, and We ensured that we did not harm or abuse consumers.”
