Top lawmakers on the House Financial Services Committee are using the stretch run of this congressional term to address the impact artificial intelligence has on the finance and housing sectors.

Reps. Patrick McHenry, R-N.C., and Maxine Waters, D-Calif., the chair and ranking member of the committee, respectively, announced Monday the introduction of a resolution to acknowledge the rising use of AI in financial services and in the housing industry, as well as a bill that calls on financial regulatory agencies to study the benefits of the technology within the sector.

The resolution and bill are the culmination of nearly a year of work from the committee’s bipartisan AI working group and come just days before a hearing that will explore how the technology is framing the future of finance.

“Artificial intelligence holds the promise to revolutionize our financial system,” McHenry said in a statement. “As firms increasingly leverage AI, lawmakers and regulators tasked with oversight of the financial services industry must constantly evaluate the risks and benefits this technology poses. These bills are a small, but critical, step forward to empower the financial system to realize the numerous benefits artificial intelligence can offer for consumers, firms, and regulators.”

The resolution, introduced by McHenry and co-sponsored by Waters, spells out the House Financial Services Committee’s responsibilities when it comes to AI, covering everything from how housing market participants leverage the technology for underwriting and tenant screening to scrutinizing how financial institutions’ use of AI could increase herding behavior in the markets.

The committee, McHenry and Waters write in the resolution, will make sure financial regulatory agencies are carrying out their enforcement powers and have the right tools to do so as AI usage in the sectors proliferates. They’ll also consider reforms to data privacy laws “given the importance of data, especially consumer data, to AI,” collaborate with regulators on AI’s impact on the workforce and do what they can to make sure the United States leads globally on the development and use of AI in the industries.

“Artificial intelligence is growing rapidly, and people across America are already seeing its use in our nation’s housing and financial services sectors, with impacts on mortgage lending, credit scoring, and more,” Waters said in a statement. “Our committee will continue to collaborate closely with the federal government to identify the risks and benefits of AI and to explore further legislation needed to protect people and our communities.”

The Analysis and Improvement Act of 2024 — or the AI Act of 2024 — would require the Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau and the National Credit Union Administration to deliver a report to the House Financial Services Committee that examines a variety of AI-related issues in the agencies’ respective sectors.

Those issues include the use of AI in home valuation, loan underwriting and servicing, how banking institutions use AI to identify fraud, money laundering and cybercrime, and how AI is used in debt collection and foreclosures. There are also callouts in the bill for how AI can mitigate bias and discrimination in banking services, how the technology can level the playing field between small and large financial institutions, and how it can benefit cybersecurity risk management.

The bill would also require the Securities and Exchange Commission to produce a report on AI’s risks and benefits to the markets and have the Treasury Department study the technology’s ability to secure the country’s financial system from national security threats. 

Another provision of the bill calls on the Department of Housing and Urban Development, the Federal Housing Finance Agency, the Rural Housing Service of the Department of Agriculture and the CFPB to report on the risks and benefits of AI on housing and mortgage regulators.

“I look forward to passing these bills and continuing to work in a bipartisan manner on this important issue next Congress,” Waters said.

PROVIDENCE, R.I., December 02, 2024–(BUSINESS WIRE)–Citizens Financial Group, Inc. (NYSE: CFG) announced today that Chairman and Chief Executive Officer Bruce Van Saun will participate at the Goldman Sachs U.S. Financial Services Conference on Tuesday, December 10, 2024 at 10:00 am ET.

The live webcast will be available at http://investor.citizensbank.com under Events & Presentations.

About Citizens Financial Group, Inc.

Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $219.7 billion in assets as of September 30, 2024. Headquartered in Providence, Rhode Island, Citizens offers a broad range of retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations and institutions. Citizens helps its customers reach their potential by listening to them and by understanding their needs in order to offer tailored advice, ideas and solutions. In Consumer Banking, Citizens provides an integrated experience that includes mobile and online banking, a full-service customer contact center and the convenience of approximately 3,100 ATMs and approximately 1,000 branches in 14 states and the District of Columbia. Consumer Banking products and services include a full range of banking, lending, savings, wealth management and small business offerings. In Commercial Banking, Citizens offers a broad complement of financial products and solutions, including lending and leasing, deposit and treasury management services, foreign exchange, interest rate and commodity risk management solutions, as well as loan syndication, corporate finance, merger and acquisition, and debt and equity capital markets capabilities. More information is available at www.citizensbank.com or visit us on Twitter, LinkedIn or Facebook.

CFG-IR

View source version on businesswire.com: https://www.businesswire.com/news/home/20241202171739/en/

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Editor’s note: The Astana Times continues a section featuring articles by our readers. As a platform that values diverse perspectives and meaningful conversations, we believe that this new section will provide space for readers to share their thoughts and insights on various topics that matter to them and the AT audience.

Think about joining the work force right out of university, only to realize that you have no clue how to handle your salary, pay rent, or even save for the future. This is the reality that many young people in Kazakhstan face today. Without even basic financial knowledge, individuals are forced to make difficult decisions on their own and frequently end up making mistakes that have long-term consequences. 

Overall, financial illiteracy has emerged as a long-term threat to the stability of the nation’s economy as well as the economic prospects of its citizens, and it deserves serious attention.

Most young people in Kazakhstan lack elementary skills of managing small amounts of cash, saving or handling credit. Although the curriculum of education comprises many subject areas, it lacks a focus on imparting important life experiences. As a result, young people enter adulthood without basic skills on how to manage debt or budget for future expenses. Financial instability among a sizable section of the populace has an adverse effect on economic growth and stability in addition to personal struggles. 

The first strategic actions taken in personal finance, such as borrowing money or using credit cards, often set young people on either good or bad financial paths. For instance, a significant portion of the youth in Kazakhstan applies for loans either for personal use or informal financial loans without understanding the implications of such actions. This can result in deep debt, to the extent that they cannot finance other activities such as starting a business or buying a home. 

To address this issue, financial literacy should be incorporated into the curriculum at all levels of education. Young people should be taught about issues concerning budgeting, saving and investing at an early stage so that they are well-prepared to manage these processes throughout their lives. Useful knowledge about effective budgeting, objectives for everyday expenses, saving, and other practices can help build a solid foundation that avoids excessive use of credit and other risky financial decisions.

Establishing such programs is not enough; we require qualified teachers who can effectively explain these concepts to achieve the desired results. Currently, there is a lack of qualified teachers in Kazakhstan at schools and universities who can competently and confidently teach the principles of financial literacy. Additionally, involving professionals from the finance sector to conduct workshops or seminars could help bring both theory and practice to life. 

Furthermore, Kazakhstan can learn from examples of other countries. Singapore, for instance, integrates financial education into its school system, resulting in a financially literate generation. Similarly, schools in Finland emphasize mastering good financial skills at an early age, ensuring students grow up with sound financial knowledge. 

However, some may argue against introducing yet another subject to the curriculum, citing the already heavy demands on students and the scarcity of funding for schools. Others might argue that teaching children how to use, save, invest, and manage money should be the responsibility of parents. Financial literacy is not just another addition to the formal education system; it is a part of personal life experience that significantly impacts every aspect of an individual’s future. 

One of the tools that could enhance financial literacy includes financial applications and online classes. Such platforms would democratize knowledge and ensure that young people can learn various aspects of personal finance at their own pace. 

Investing in personal financial capability is not only an investment in the population but also in the future of Kazakhstan. By ensuring people understand finances, we can foster increased commonwealth, greater investment and more informed decision-making, which will contribute to national growth.

It is crucial for Kazakhstan to promote financial literacy as part of formal education, organize special workshops for teachers, and encourage families to engage with financial topics together with their children. In doing so, we can ensure that our younger generation creates better and safer lives for themselves and contributes to building a stronger nation. 

The author is Aigerim Kosbayeva, a graduate student of the Nazarbayev University Graduate School of Public Policy. 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the position of The Astana Times.