House introduces bipartisan bill on AI in banking and housing

The bill would require a report on how these industries use AI to valuate homes and underwrite loans

The question of the impact of artificial intelligence is still an open one; it's currently speculated by McKinsey Global Institute that AI could increase global GDP by about 1.2% annually by 2030, while PricewaterhouseCoopers estimates that AI could contribute up to $15.7 trillion to the global economy by the same year. 

The private sector is studying this, with OpenAI recently announcing the appointment of Dr. Ronnie Chatterji, who served as Acting Deputy Director of the White House National Economic Council, as its first Chief Economist, charging him with studying the economic impact of AI.

Congress has also made this a priority, and on Monday the Chairman of the House Financial Services Committee, Patrick McHenry from North Carolina, and Ranking Member Maxine Waters from California, announced two bipartisan measures that are meant to highlight the impact of AI on the financial services and housing industries. 

That includes a resolution, introduced by McHenry amd cosponsored by Waters, that acknowledges the growing use of AI in the financial services and housing industries.

"Given the critical role of the financial and housing markets, the Committee on Financial Services of the House of Representatives should play a leading role in overseeing the adoption of artificial intelligence ("AI") in the financial and housing industries," it says in the resolution.

That includes ensuring that regulators apply and enforce existing laws, including anti-discrimination laws; that those regulators have the tools to oversee new products and services; and that the Committee should work with them to understand AI's impact on the workforce.

In addition, Waters introduced a bill, cosponsored by McHenry, directing the federal financial regulators to study the present and potential benefits and risks of AI as it relates to the financial and housing markets.

The bill calls on the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation Board, the Comptroller of the Currency, the Director of the Bureau of Consumer Financial Protection, and the National Credit Union Administration Board to submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate, and publish publicly, examining realized and potential benefits and risks of AI technology.

That includes examining the use of AI by banking institutions for customer service, as well as their use of AI in loan underwriting and servicing, in home valuation, in detecting and deterring fraud, money laundering, cybercrime, and other illicit activity, as well in debt collection, including foreclosures, and how AI is used for internal processes and compliance procedures, including for compliance with Federal fair lending laws.

“Artificial intelligence holds the promise to revolutionize our financial system,” McHenry said in a statement. “As firms increasingly leverage AI, lawmakers and regulators tasked with oversight of the financial services industry must constantly evaluate the risks and benefits this technology poses."

“Artificial Intelligence is growing rapidly, and people across America are already seeing its use in our nation’s housing and financial services sectors, with impacts on mortgage lending, credit scoring, and more,” Waters said in a statement. 

"Our Committee will continue to collaborate closely with the federal government to identify the risks and benefits of AI and to explore further legislation needed to protect people and our communities."

Both the Biden and incoming Trump administrations have made AI a key focus, with the Biden administration issuing guidelines to federal agencies buying AI, as well as an Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, guidelines for agencies when it comes to buying AI, and a taskforce to combat deepfakes.

Trump, meanwhile, is reportedly looking to create a new AI czar position in the White House. 

During the campaign, Trump mentioned artificial intelligence a number of times, including on a podcast with Logan Paul, in which he described AI as a “superpower” that writes “beautifully.” At the same time, also called its capabilities “alarming," specifically mentioning deepfakes, which are videos or audio of a person, in which their face, voice, or body has been digitally altered so that they appear to be someone else.

Trump also noted that the US is in competition with China for supremacy with AI technology, and his belief that environmentalists’ concerns over energy use could cause America to lose ground.

As president-elect, Trump also vowed to repeal the Biden executive order on AI.