Rep. Maxine Waters (D-California), the top Democrat on the House Financial Services Committee, said artificial intelligence was outstripping Congress’ regulatory capacity and lawmakers needed to act quickly.
“We don’t know all the dangers of AI,” Waters said in an exclusive interview with Yahoo Finance on Thursday. “We don’t know what they’re going to make, so I think we have to be careful. We have to be very careful. We need regulation.
Waters will hold a hearing with House Financial Services Committee Chairman Patrick McHenry (R, N.C.) on Microsoft’s ChatGPT and other advances in artificial intelligence and the risks to the financial and housing sectors as soon as possible. I am calling for you.
”[We need] To keep consumers from being abused, to help us understand the truth, and to make sure the biases already built into our algorithms aren’t what causes problems with AI… , we need to start by making sure regulations are in place. Protect everyone,” Waters said.
Waters told Yahoo he had not heard back from McHenry. House Financial Services Committee Republican spokeswoman Laura Peavy said Waters also said, “As you know, we are considering holding a committee hearing on AI in the fall.”
Waters says he’s leaning toward the idea of creating a separate agency.
“I believe this technology is very new and very different, and we have to educate people about chatbots and black boxes and things like that,” Waters said. “We really need another agency to put in place the necessary regulations for this new technology.”
Waters cited the Consumer Financial Protection Bureau’s position that AI technology still needs to comply with existing consumer protection laws.
Earlier this year, the agency released a policy statement outlining what constitutes misuse of AI technology after taking multiple actions in 2022. One of them stipulated that digital marketers who use algorithms would be subject to the Consumer Financial Protection Act and violators would be held accountable.
Waters is particularly keen to ensure that AI does not adopt biases that hurt certain types of consumers. Her AI Task Force in Congress has advocated for ethical and legal issues related to algorithmic bias and discrimination, especially when automated programs do not behave as intended or adversely affect members of protected classes. raised concerns.
The task force found that these technologies can embed historical inequalities in financial services and housing markets through the use of data that reflects underlying bias and discrimination.
Stablecoin Bill ‘Very Close’
Waters also said in an interview Thursday that Democrats and Republicans on the House Financial Services Committee are “very close” to agreeing on a bipartisan bill to govern stablecoins, but when it comes to regulating cryptocurrencies as a whole. “We haven’t reached an agreement yet,” he said.
“We believe we can get a bipartisan bill. [with] Stablecoins that hold assets that companies claim they own to protect consumers…stablecoins [are] We are well on our way to potentially achieving the kind of regulation that is needed,” said Waters.
Waters worked closely with McHenry on a bill to regulate stablecoins, but the bill fell apart when Republicans took control of the House and both sides started from scratch. Republicans on the committee have incorporated some of the Democrats’ concerns into the new bill, but there are still some unresolved concerns.
But when it comes to drafting a larger discussion on the overall framework for regulating cryptocurrencies, “there is still a lot of work to do,” Waters said.
“I know McHenry is trying to come up with another approach to deal with cryptocurrencies, but we are certainly not quite there yet,” Waters said.
The bill aims to clarify the gap between the rules of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). It also dictates that companies must register with the SEC and requires the SEC to create new customized rules to govern cryptocurrencies.
The bill also seeks to clarify a long-standing unresolved issue for the cryptocurrency community: what are the criteria for classifying crypto tokens as commodities or securities. This gives the CFTC jurisdiction over digital products and clarifies the SEC’s jurisdiction over digital assets offered as part of investment agreements.
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