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On Tuesday, July 23, 2024, at 10:00 a.m. ET, Full Committee Chair McHenry and Ranking Member Waters will host a hearing titled “Exploring AI Innovation: Overview of Applications of AI in financial services and housing./"

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Witnesses for this single-committee hearing will be:

• John Zecca, executive vice president, global head of legal, risk and regulation, NASDAQ

• Ondrej Linda, Director of Personalization AI, Zillow

• Elizabeth Osborne, director of operations, Great Lakes Credit Union

• Frederick Reynolds, Deputy General Counsel for Regulatory Legal Matters and Chief Compliance Officer, FIS Global

• Vijay Karunamurthy, Chief Technology Officer, Scale AI

• Lisa Rice, president and CEO, National Fair Housing Alliance

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Background

Starting in 2022, the public began to understand how artificial intelligence (AI) could not only radically change the lives of individuals, but revolutionize every aspect of our economy. The most recent development in AI technology that has captured public attention is “Generative AI” or Gen AI. Members of the United States House of Representatives Committee on Financial Services (Committee) have recognized the significant impact of Generation AI, having studied AI in the 116th and 117th Congresses in 10 different hearings hosted by the Artificial Intelligence Working Group. The Committee examined how the financial services and housing industries, as well as government agencies, have used AI to do their jobs more effectively, and how individuals across America and around the world have interacted with it. AI and have experienced it in their financial life.

However, the emergence of the AI generation and the massive investments made require the Committee to reflect on the benefits, risks and consequences of AI. This involves examining the existing statutory and regulatory framework to determine whether it is sufficient to protect our financial and real estate markets. In response to this watershed moment in AI development, in January 2024, Chairman Patrick McHenry and Ranking Member Waters established the bipartisan AI Committee

Working group (Groupe de travail) composed of 12 members. Republican members included Speaker Patrick McHenry (NC-10), Congressman French Hill (AR-02), Congressman Young Kim (CA-40), Congressman Mike Flood (NE-01), Congressman Zach Nunn (IA-03) and MP Erin Houchin (IN-09). Democratic members included Maxine Waters (CA-43), Congressman Stephen F. Lynch (MA-08), Congresswoman Sylvia Garcia (TX-29), Congresswoman Ayanna Pressley (MA-07), Congressman Sean Casten (IL-06). ) and MP Brittany Pettersen (CO-07).

The working group hosted six roundtable discussions focused on AI use cases in the financial services industry, including the range of benefits and risks the technology poses, as well as barriers to adoption of technology.

Federal regulators. During the two sessions with federal regulators, panelists addressed concerns that AI could lead to bias and discrimination and make it harder to detect such outcomes due to a lack of explainability. Regulators have generally noted that the use of AI does not exempt entities from complying with anti-discrimination laws. Several regulators have indicated that regulated entities are expected to comply with all laws, including anti-discrimination and other consumer protection laws, in a technologically neutral manner.

Capital markets. In general, market participants said they are taking a measured approach in implementing AI technology in certain aspects of their business. Market participants said they are still in the early stages of exploiting the capabilities of this technology. However, many participants indicated that they have been using ML models for over 10 years at increasing rates for data analysis and are exploring the potential for further advances in AI capabilities to create new use cases in financial markets.

Housing and insurance. During the Housing and Insurance session, participants highlighted how AI has facilitated a major shift in housing and insurance products and services. This shift brought new benefits and conveniences to consumers, but also presented fair housing issues, consumer protections, and other challenges. For example, companies are deploying AI to underwrite mortgages and insurance policies, screen tenants, simplify and improve the overall customer experience, and perform data analytics that guide their consumer and risk responses.

Financial institutions and non-banking companies. This round table included two panels…

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Hearing page: https://democrats-financialservices.house.gov/events/eventsingle.aspx?EventID412617

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