AI Innovation Explored: Insights into AI Applications in Financial Services and... (EventID=117527)

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Connect with the House Financial Services Committee Get the latest news: https://democrats-financialservices.house.gov/ Follow us on Facebook: https://www.facebook.com/HouseFinancialCmte Follow us on Twitter: https://twitter.com/FSCDems ___________________________________ On Tuesday, July 23, 2024, at 10:00 a.m. (ET) full Committee Chairman McHenry and Ranking Member Waters will host a hearing entitled, “AI Innovation Explored: Insights into AI Applications in Financial Services and Housing." ___________________________________ Witness for this one-panel hearing will be: • John Zecca, Executive Vice President, Global Chief Legal, Risk and Regulatory Officer, NASDAQ • Ondrej Linda, Director of Personalization AI, Zillow • Elizabeth Osborne, Chief Operations Officer, Great Lakes Credit Union • Frederick Reynolds, Deputy General Counsel for Regulatory Legal and Chief Compliance Officer, FIS Global • Vijay Karunamurthy, Chief Technology Officer, Scale AI • Lisa Rice, President and CEO, National Fair Housing Alliance ___________________________________ Background Beginning in 2022, the public began to experience how artificial intelligence (AI) could not only dramatically change the lives of individuals but could revolutionize every aspect of our economy. The most recent development in AI technology that has captured the public’s attention is “Generative AI” or Gen AI. Members of the U.S. House of Representatives Committee on Financial Services (Committee) recognized the significant impact of Gen AI, having previously studied AI during the 116th and 117th Congresses at 10 different hearings held by the Task Force on Artificial Intelligence. The Committee considered how the financial services and housing industries, as well as government agencies, used AI to more effectively do their jobs, and how individuals across America and around the world both interacted with and experienced AI in their financial lives. However, the emergence of Gen AI and the massive investments being made require the Committee to consider the benefits, risks, and consequences of AI. This includes examining the existing statutory and regulatory framework to determine whether it is sufficient to safeguard our financial and housing markets. In response to this watershed moment in AI development, in January 2024, Chair Patrick McHenry and Ranking Member Waters established the bipartisan AI Working Group (Working Group) comprised of 12 Members. The Republican Members included Chairman Patrick McHenry (NC-10), Congressman French Hill (AR-02), Congresswoman Young Kim (CA-40), Congressman Mike Flood (NE-01), Congressman Zach Nunn (IA-03), and Congresswoman Erin Houchin (IN-09). The Democratic Members included Ranking Member 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 Congresswoman Brittany Pettersen (CO-07). The Working Group conducted six roundtablesfocused on AI use cases across the financial services industry, including the range of benefits and risks the technology poses, and the hurdles to adopting the technology. Federal Regulators. During the two sessions held with federal regulators, panelists responded to concerns that AI could lead to bias and discrimination and make it harder to detect such outcomes due to a lack of explainability. Regulators generally noted that the use of AI did not absolve entities from complying with anti-discrimination laws. Several regulators commented that regulated entities are expected to follow all laws, including anti-discrimination and other consumer protection laws, in a tech-neutral manner. Capital Markets. In general, market participants stated they are taking a measured approach to implementing AI technology in certain aspects of their business. Market participants shared that they are still in the early stages of this technology’s capabilities. However, many participants reported that they have been using ML models for upwards of 10 years at increasing rates for data analysis and are exploring the potential for new advancements in AI’s capabilities to create new use cases in capital 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 has allowed for new benefits and conveniences to consumers, but has also presented fair housing, consumer protection, and other challenges. For example, businesses are deploying AI to underwrite mortgages and insurance policies, screen tenants, simplify and enhance the overall customer experience, and perform data analytics that guide their responses to consumers and risks. Financial Institutions and Nonbank Firms. This roundtable included two panels... ___________________________________ Hearing page: https://democrats-financialservices.house.gov/events/eventsingle.aspx?EventID=412617