U.S. House Committee on Financial Services holds hearing on artificial intelligence use and regulatory gaps in finance and housing

The U.S. House Committee on Financial Services held a hearing on how artificial intelligence is being deployed across financial services and housing, focusing on how existing laws and regulations apply and where current frameworks may create uncertainty or inhibit innovation. Discussion centered on balancing AI-enabled operational benefits such as risk management, fraud mitigation and customer service with emerging risks and consumer protection considerations. Members highlighted the bipartisan Unleashing AI Innovation in Financial Services Act, which would enable regulator-approved federal sandbox programs with defined size and scope, required compliance strategies and risk management, and limits intended to avoid systemic or national security risks, while keeping fraud and unsafe or unsound practices prohibited. Several participants also raised concerns about a growing patchwork of state AI laws and called for a harmonized federal approach. Witnesses emphasized practical supervisory and governance questions, including how traditional model risk management guidance should be interpreted for AI models, and argued for coordinated federal standards potentially leveraging the National Institute of Standards and Technology, while opposing creation of a single central AI regulator.