BY DAVE KOVALESKI |
U.S. Reps. Maxine Waters (D-CA) and Bill Foster (D-IL) are urging federal financial regulators to ensure that advanced technologies like artificial intelligence (AI) do not create an algorithmic bias for underserved communities.
“As you assess the use of AI from financial institutions you oversee, you must prioritize principles of transparency, enforceability, privacy, and fairness and equity,” Waters and Foster wrote.
In a letter to the heads of federal financial regulatory agencies, the lawmakers highlighted the need for AI technologies, including machine learning (ML), to be used ethically and help low- and moderate-income communities of color that have been underserved. They also outline the risks and possible benefits that emerging technologies pose in the financial services and housing industry.
“As you assess the use of AI from financial institutions you oversee, you must prioritize principles of transparency, enforceability, privacy, and fairness and equity,” Waters and Foster wrote. “This will ensure that AI regulation and rulemaking can meaningfully address appropriate governance, risk management, and controls over AI. They will be essential when confronting challenges in the development, adoption, and management of AI. They must be relied upon when considering clarification that financial institutions will need to move forward with AI in a just and equitable manner.”
The letter was sent to Jerome Powell, chair of the Federal Reserve System; Todd Harper, chair of the National Credit Union Administration; Rohit Chopra, director of the Consumer Financial Protection Bureau; Jelena McWilliams, chair of the Federal Deposit Insurance Corporation; and Michael Hsu, acting Comptroller of the Currency of the Office of the Comptroller of the Currency. All are members of the Federal Financial Institutions Examination Council.
“Financial institutions using AI must be encouraged to do more to promote racial and gender equity. Fintechs and others using these technologies should play their part in building a more just and fair financial system in the 21st century. Historically marginalized communities, including especially low- and moderate-income communities of color, have long been subject to discrimination in the financial services and housing space and forced into using subpar products and services. Through their use of new technologies, financial institutions using AI have the potential to play a role in offerings to communities who have been neglected in the past,” they added.
Waters is the chair of the House Financial Services Committee, and Foster is the chair of the Task Force on Artificial Intelligence.