Comment to House Financial Services Committee on Regulation of AI

Comment to House Financial Services Committee on Regulation of AI On August 14, CDT submitted comments in response to the House Financial Services Committee’s request for information on the application of current federal laws and regulations related to the use of AI in the financial marketplace and any proposed reforms to provide for an appropriately modernized and comprehensive federal financial AI framework. The Committee and regulators have explored implications of AI adoption in recent years, and CDT has called for stronger enforcement of laws and regulations and recommended reforms to promote accountability of AI integrated into the provision of financial services, housing, and related needs. Our comments: - Suggest requirements to improve model fairness, explainability, and model risk management; - Identify areas for improvement in existing financial data privacy laws and the limitations of disclosures alone as a governance measure; - Discuss liability of financial institutions and their third-party service providers, and financial institutions’ obligations to manage their third-party services; and - Recommend steps to address AI’s impacts on housing and workers.