Bipartisan support for artificial intelligence (AI) in the housing and banking sectors has been highlighted by two significant legislative measures introduced this week in the United States Congress. As the AI landscape continues to evolve, legislators are taking steps to investigate how AI, particularly generative AI, is being utilised within these critical industries.

On Monday, Republican Representative Patrick McHenry of North Carolina, who chairs the House Financial Services Committee, announced the introduction of a resolution that has garnered backing from the committee's ranking member, Democrat Maxine Waters from California. This resolution aims to acknowledge the increasing use of AI in the financial services and housing sectors.

Building on this initiative, Waters, with McHenry's support, has also proposed a piece of legislation titled “The AI Act of 2024.” This act would mandate financial regulatory agencies to examine the benefits of AI technologies within the sector. According to a statement from the Committee, the proposed measures extend the work of the existing Bipartisan AI Working Group. This group’s objective is to identify both the advantages and risks associated with AI technology and assess how existing laws and regulations may affect its adoption.

McHenry stated, “Artificial intelligence holds the promise to revolutionize our financial system. 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 realise the numerous benefits artificial intelligence can offer for consumers, firms, and regulators.”

Waters expressed pride in collaborating with McHenry on these bipartisan bills, emphasising the Committee’s role in understanding the impact of AI on individuals. She stated, “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.”

Despite the introduction of these initiatives, it remains uncertain whether the proposed legislation will advance. A Democratic aide from Waters’ office has indicated that the current Congress has limited time left in its calendar and these bills are more likely to be considered in the next Congress. The aide further highlighted the pressing need to scrutinise AI's impact on the housing sector, noting its increasing role in decision-making processes that can significantly affect access to housing, pricing, and overall affordability.

The aide emphasised, “We know that AI is increasingly being used to make often black box decisions about who will or won’t have access to housing or how much they will pay. An inaccurate prediction, faulty data, or inflated pricing is quite literally determining access to housing—it’s the difference between having a roof over one’s head or not.”

Furthermore, while there is recognition of AI's potential to facilitate housing access and reduce costs, the aide underscored a commitment to ensuring that any advancements in technology do not perpetuate systemic biases or exacerbate existing crises in affordable housing and homelessness.

Taylor Stork, president of the Community Home Lenders of America (CHLA), highlighted the potential of AI in driving technological innovation within housing and financial services. He remarked that he is “encouraged by the prospect that AI can add to technological improvements in the housing and financial services realms.” Stork expressed support for H.R. 10262, viewing it as a chance to investigate the tangible and prospective advantages of AI.

Stork noted, “AI can serve to decrease the cost of homeownership or decrease the cost of manufacturing a mortgage, and effectively act to level the playing field so that competitors, large and small, have a higher level of parity, and that way we ensure competition in the marketplace.” He observed the ongoing integration of AI within legislative processes, citing firsthand accounts from congressional staffers who are using AI to formulate legislative language.

He acknowledged, however, that the transition towards AI could evoke concerns about job security. “I think there’s gonna be a lot of fear about what it could replace until we start to see some of the new opportunities that result from having replaced some of the nonvaluable repetitive work tasks by automation so that our knowledge workers can focus their capabilities on a higher level of value,” Stork mused.

Despite the challenges, Stork is optimistic about the positive contributions of AI, particularly in light of rising costs within the mortgage industry. He explained, “We have watched the cost of manufacturing alone skyrocket…we’ve watched the cost of a mortgage go up higher and higher…While certainly there are opportunities for artificial intelligence to be problematic in some areas, there are also opportunities for some of the administrative and more routine work and tasks to become less expensive and become more efficient.”

As the dialogue on AI's role in housing and finance continues, the implications for business practices, regulatory frameworks, and consumer experiences remain a pivotal focus for lawmakers and industry stakeholders alike.

Source: Noah Wire Services