New House AI Bills for the Financial Services Sector

By: Christopher Valente, Scott Gelbman, and Joshua Durham

Artificial intelligence (AI) remains top of mind for lawmakers and regulators, who continue to grapple with new legislative proposals, as well as a changing regulatory regime designed to prepare the US government to interact with AI-related issues, while also positioning the US to be a leader in AI innovation. In line with 15 USC Ch. 119 and Executive Order 14110, two more bipartisan House bills were just introduced to further the government’s response to AI.

The first bill, H.R. 1600, would direct the House Committee on Financial Services (HFSC) to “play a leading role” in AI’s use in the financial services sector. The second bill, H.R. 10262 (the “Analysis and Improvement Act of 2024”), would similarly direct federal regulators to study the benefits and risks of AI in their respective fields, such as in banking, investments, housing, and financial crimes. These bills are noteworthy because they were written by the bipartisan leadership of the HFSC, Rep. Patrick McHenry (R. NC) and Rep. Maxine Waters (D. CA), who are known for their sharp opposition to each other on other issues but have found bipartisan agreement on AI in both these proposed pieces of legislation, as well as their leadership on the HFSC AI Working Group.

It is noteworthy that AI was the subject of the final HFSC committee hearing of this session of Congress last week. At the hearing, multiple high-profile tech CEOs attended as witnesses, while several lawmakers were highly interested in both the transformative benefits and the challenges of AI in financial services. It appears that lawmakers are torn between preventing issues like AI-enhanced fraud but are also concerned about overregulating and standing in the way of AI innovation writ large.

While bipartisan, H.R. 1600 and H.R. 10262 are nevertheless unlikely to pass during the final days of this Congress. However, we expect these proposals to be the starting point for work in the new Congress in January. Additionally, we await the release of an expected separate, much larger report from the bipartisan House AI Working Group, that we expect will address a potential path forward on AI in every industry, including financial services.