House Financial Services Committee must play major role in adopting AI for specific industries

The U.S. House Financial Services Committee should play a leading role in overseeing the adoption of artificial intelligence (AI) in the nation’s financial services and housing industries, according to a new staff report released by the committee’s Bipartisan Working Group on AI.

“Because the development of AI technology can outpace Congress and regulators, the Committee must lead in examining the associated benefits and risks in the financial services and housing sectors and ensure integral consumer and investor protections,” says the staff report, AI Innovation Explored: Insights into AI Applications in Financial Services and Housing .

“This includes ensuring that financial services and housing industries’ use of AI does not lead to bias and discrimination in decision-making tools,” the report adds.

The staff report is the culmination of six roundtables focused on identifying existing and growing AI use cases across the financial services and housing industries, including the range of benefits and potential risks the technology poses, and the hurdles to adopting the technology.

“As consumers and businesses increasingly look to leverage AI, it is critical that lawmakers and regulators keep pace,” said U.S. Rep. Patrick McHenry (R-NC), chairman of the Financial Services Committee. “This report represents a bipartisan effort to understand the benefits and potential risks of artificial intelligence in the financial services and housing industries.”

The congressman added that the staff report also highlights the need for proper oversight and consumer protections that address the growing number of use cases for AI, and it lays out a blueprint for lawmakers as they navigate how to harness and oversee this evolving technology.

Other takeaways from the report include tasking the committee to ensure that regulators apply and enforce existing laws, including anti-discrimination laws, and assess regulatory gaps as market participants adopt AI.

The committee also should ensure that financial regulators have the appropriate tools to oversee new products and services, and it should continue to consider how to reform data privacy laws given the importance of data, especially consumer data, to AI, the report says.

Additionally, the committee should work with financial regulators to understand AI’s impact on the workforce and ensure U.S. global leadership on AI development and use.

“In light of recent developments in Generative Al, we are witnessing the growing impact and role of Al in the financial lives of American families,” said Financial Services Committee Ranking Member Maxine Waters (D-CA), who, along with McHenry, created the committee’s Bipartisan Working Group on AI.

The working group is led by U.S. Reps. French Hill (R-AR) and Stephen Lynch (D-MA), chairman and ranking member, respectively.

“Since the creation of our AI working group, our members on committee have worked diligently to explore the different applications of AI within the Housing and Financial Services sector,” said Hill. “We met with industry leaders and financial regulators to unpack AI’s impacts on existing laws and what gaps may exist. This report highlights our commitment to driving innovation, protecting privacy rights of Americans, and ensuring that the United States takes a thoughtful approach while striving to be a global leader in AI development and use.”

The Financial Services Committee will hold a hearing on July 23, entitled “AI Innovation Explored: Insights into AI Applications in Financial Services and Housing,” to further discuss the findings of the staff report.

“As our report makes clear, this committee will not only lead the way in overseeing Al to ensure equity, fairness, and privacy but also get to work on crafting legislation to maximize the benefits of Al for all communities, including communities of color, while maintaining America’s global leadership in AI development,” said Waters.

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