The order from the Biden administration includes recommendations for financial services regulators to consider new regulations and clarify guidance on AI.
11/09/2023 11:50 A.M.
2.5 minute read
The Biden administration has issued an executive order establishing new standards for protecting Americans’ privacy and managing the risks of artificial intelligence.
The order encourages independent regulatory agencies with oversight over the financial services industry to “use their authorities, including considering new rulemakings and clarifying existing regulations and guidance to, ‘to protect American consumers from fraud, discrimination, and threats to privacy and to address other risks that may arise from the use of AI, including risks to financial stability,’” according to a summary from Brownstein Hyatt Farber Schreck LLP.
Independent regulators are also encouraged to clarify “the responsibility of regulated entities to conduct due diligence on and monitor any third-party AI services they use, and emphasizing or clarifying requirements and expectations related to the transparency of AI models and regulated entities’ ability to explain their use of AI models,” according to the summary.
The order seeks to establish AI standards without legislation available on this issue and includes eight standard principles and priorities that will direct the administration’s additional work on AI, according to Brownstein:
- “Artificial Intelligence needs to be safe and secure. To achieve this goal, the [executive order] recommends robust, reliable, repeatable and standardized evaluations of AI systems, and the development of policies and institutions to test, understand and mitigate the risks from AI systems.
- The U.S. government should promote responsible innovation, competition and collaboration to unlock AI’s potential to solve the most challenging issues.
- Responsible development and use of AI requires supporting American workers through job training and education programs.
- AI policies must be consistent with policies to advance equity and civil rights.
- The interests of Americans who increasingly use, interact with or purchase AI and AI-enabled products in their daily lives must be protected.
- Americans’ privacy and civil liberties must be protected, and the collection, use and retention of data must be lawful, secure and confidential.
- The federal government’s own use of AI must be closely monitored to manage the risks the technology poses, and agencies must increase their internal capacity to regulate, govern and support responsible use of AI to deliver results for all Americans.
- The federal government should become a global thought leader on the societal, economic and technological progress in this new era of disruptive innovation and change.”
Other AI Efforts
In April, several federal agencies released a policy statement on the use of AI products under existing laws, particularly to ensure that consumers aren’t discriminated against by the algorithms companies use for loans or other financial products, ACA International previously reported.
A bipartisan proposal in the U.S. House of Representatives would create a national commission to study AI technology, and U.S. Sen. Charles Schumer, D-N.Y., has proposed a regulatory framework (PDF) for AI.
Brownstein reports that, given the broad impacts of AI, stakeholders should expect a steady pace of activity on the issue in Washington in the months ahead.