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USA: Bill on AI in financial services industry introduced to Senate

On October 17, 2023, bill S.3050 for the Artificial Intelligence Advancement Act of 2023 was introduced to the U.S. Senate and thereafter referred to the Committee on Armed Services. In particular, the bill aims to, among other things:

  • require a report on artificial intelligence (AI) regulation in the financial services industry;
  • establish AI bug bounty programs;
  • require a vulnerability analysis study for AI-enabled military applications; and
  • require a report on data sharing and coordination.

Notably, the bill would mandate each of the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the National Credit Union Administration, and the Bureau of Consumer Financial Protection to submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report on its gap in knowledge relating to AI, including an analysis on:

  • which tasks are most frequently being assisted or completed with AI in the institutions the agency regulates;
  • current governance standards in place for AI use at the agency and current standards in place for AI oversight by the agency;
  • potentially additional regulatory authorities required by the agency to continue to successfully execute its mission;
  • where AI may lead to overlapping regulatory issues between agencies that require clarification;
  • how the agency is currently using AI, how the agency plans to use such AI over the next three years, and the expected impact, including fiscal and staffing, of those plans; and
  • what resources, monetary or other resources, if any, the agency requires to both adapt to the changes that AI will bring to the regulatory landscape and to adequately adopt and oversee the use of AI across its operations described in the previous point.

You can read the bill here and track its progress here.