I 

118TH CONGRESS 

2D SESSION H. R. 10262 

To require the financial regulators to carry out studies on the realized 

and potential benefits of artificial intelligence, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 26, 2024 

Ms. WATERS (for herself and Mr. MCHENRY) introduced the following bill; 

which was referred to the Committee on Financial Services 

A BILL 

To require the financial regulators to carry out studies on 

the realized and potential benefits of artificial intelligence, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Analysis and Improve5 ment Act of 2024’’ or the ‘‘AI Act of 2024’’. 

6 SEC. 2. STUDY ON AI BENEFITS AND RISKS BY BANKING 

7 REGULATORS. 

8 (a) REPORT REQUIRED.—Not later than 180 days 

9 after the date of the enactment of this Act, the Board 

10 of Governors of the Federal Reserve System, the Federal 


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1 Deposit Insurance Corporation Board, the Comptroller of 

2 the Currency, the Director of the Bureau of Consumer Fi3 nancial Protection, and the National Credit Union Admin4 istration Board shall submit to the Committee on Finan5 cial Services of the House of Representatives and the 

6 Committee on Banking, Housing, and Urban Affairs of 

7 the Senate, and publish publicly, a report that examines— 

8 (1) realized and potential benefits and risks of 

9 AI technology, including— 

10 (A) banking institutions’ use of AI for cus11 tomer service; 

12 (B) banking institutions’ use of AI in loan 

13 underwriting and servicing; 

14 (C) banking institutions’ use of AI in home 

15 valuation; 

16 (D) banking institutions’ use of AI to de17 tect and deter fraud, money laundering, 

18 cybercrime, and other illicit activity; 

19 (E) the use of AI in debt collection, includ20 ing foreclosures; 

21 (F) banking institutions’ use of AI for in22 ternal processes and compliance procedures, in23 cluding for compliance with Federal fair lending 

24 laws; 


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1 (G) how a variety of smaller banking insti2 tutions, including community banks, credit 

3 unions, rural depository institutions, minority 

4 depository institutions, and community develop5 ment financial institutions, can leverage the 

6 benefits of AI technology; 

7 (H) banking institutions’ use of AI to miti8 gate bias and discrimination and increase bank9 ing services to historically underserved and 

10 underbanked consumers; 

11 (I) banking institutions’ use of AI to en12 hance cybersecurity risk management; 

13 (J) the use of AI to enhance competitive14 ness among banking institutions of all sizes; 

15 (K) the use of AI, including for the pur16 poses described in subparagraphs (A) through 

17 (J), by nonbank financial technology firms; and 

18 (L) any other use cases such agency heads 

19 determine appropriate; 

20 (2) statues, regulations, and agency guidance, 

21 or the lack thereof, impacting the development and 

22 the use of AI by entities regulated by such agencies; 

23 (3) current use cases of AI by such agencies for 

24 supervision, and other areas where AI applications 


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1 would be uniquely suited but are not currently being 

2 deployed; and 

3 (4) any challenges such agencies have in 

4 leveraging AI and hiring and retaining staff with ex5 pertise in AI technology and potential solutions to 

6 overcome such challenges. 

7 (b) RECOMMENDATIONS.—The report required under 

8 subsection (a) shall include regulatory proposals and legis9 lative recommendations that facilitate the responsible 

10 adoption of AI within the financial services industry. 

11 (c) PUBLIC INPUT.—The agency heads described 

12 under subsection (a) shall publish a request for informa13 tion to collect public input to inform the drafting of the 

14 report required under subsection (a). 

15 (d) BANKING INSTITUTION DEFINED.—In this sec16 tion, the term ‘‘banking institution’’ means a depository 

17 institution (as defined in section 3 of the Federal Deposit 

18 Insurance Act) and a State credit union or a Federal cred19 it union (as such terms are defined, respectively, under 

20 section 101 of the Federal Credit Union Act). 

21 SEC. 3. STUDY ON AI BENEFITS AND RISKS BY THE SECURI22 TIES AND EXCHANGE COMMISSION. 

23 (a) REPORT REQUIRED.—Not later than 180 days 

24 after the date of the enactment of this Act, the Securities 

25 and Exchange Commission shall submit to the Committee 


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1 on Financial Services of the House of Representatives and 

2 the Committee on Banking, Housing, and Urban Affairs 

3 of the Senate, and publish publicly, a report that exam4 ines— 

5 (1) realized and potential benefits and risks of 

6 AI technology, including— 

7 (A) market participants’ use of AI for 

8 market research, examining the difference be9 tween public and private markets; 

10 (B) market participants’ use of AI for 

11 portfolio management; 

12 (C) exchanges’ use of AI for market sur13 veillance, fraud detection, and order placements; 

14 and 

15 (D) any other use cases the Commission 

16 determines appropriate; 

17 (2) statues, regulations, and agency guidance, 

18 or the lack thereof, impacting development and use 

19 of AI; 

20 (3) current use cases of AI by the Commission 

21 in supervision and other areas where AI applications 

22 would be uniquely suited but are not currently being 

23 deployed; and 

24 (4) any challenges the Commission has in 

25 leveraging AI and in hiring or retaining staff with 


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1 expertise in AI technology and potential solutions to 

2 overcome such challenges. 

3 (b) RECOMMENDATIONS.—The report required under 

4 subsection (a) shall include regulatory proposals and legis5 lative recommendations that facilitate the responsible 

6 adoption of AI within the financial services industry. 

7 (c) PUBLIC INPUT.—The Commission shall— 

8 (1) publish a request for information to collect 

9 public input to inform the drafting of the report re10 quired under subsection (a); and 

11 (2) consult with self-regulatory organizations to 

12 inform the drafting of the report under subsection 

13 (a). 

14 SEC. 4. STUDY ON AI BENEFITS AND RISKS BY HOUSING 

15 AND MORTGAGE REGULATORS. 

16 (a) REPORT REQUIRED.—Not later than 180 days 

17 after the date of the enactment of this Act, the Secretary 

18 of Housing and Urban Development, the Administrator of 

19 the Rural Housing Service of the Department of Agri20 culture, the Director of the Federal Housing Finance 

21 Agency, and the Director of the Bureau of Consumer Fi22 nancial Protection shall submit to the Committee on Fi23 nancial Services of the House of Representatives and the 

24 Committee on Banking, Housing, and Urban Affairs of 

25 the Senate, and publish publicly, a report that examines— 


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1 (1) realized and potential benefits and risks of 

2 AI technology, including— 

3 (A) the use of AI to create efficiencies for 

4 homebuyers in evaluating, comparing, and ob5 taining a mortgage loan and in sustaining their 

6 homeownership over time; 

7 (B) the use of AI to enhance the accuracy, 

8 efficiency, and fairness of credit decisions, par9 ticularly for homebuyers in underserved com10 munities; 

11 (C) the use of AI to enhance the effective12 ness of risk management and compliance within 

13 the housing finance system, including for com14 pliance with Federal fair lending laws; 

15 (D) the use of AI by real estate agents; 

16 (E) the use of AI in the marketing and 

17 outreach to retail customers regarding housing 

18 products; 

19 (F) the use of AI in property management; 

20 (G) the use of AI by landlords; 

21 (H) the use of AI by online housing plat22 forms; 

23 (I) the use of AI by mortgage servicers; 

24 (J) the use of AI in mortgage underwriting 

25 and servicing; and 


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1 (K) any other use cases such agency heads 

2 determine appropriate; 

3 (2) statues, regulations, and agency guidance, 

4 or the lack thereof, impacting development and im5 plementation of AI; 

6 (3) current use cases of AI by such agencies in 

7 supervision and other areas where AI applications 

8 would be uniquely suited but are not currently being 

9 deployed; and 

10 (4) any challenges such agencies have in 

11 leveraging AI and hiring or retaining staff with ex12 pertise in AI technology and potential solutions to 

13 overcome such challenges. 

14 (b) RECOMMENDATIONS.—The report required under 

15 subsection (a) shall include regulatory proposals and legis16 lative recommendations that facilitate the responsible 

17 adoption of AI within the housing industry and the hous18 ing finance industry. 

19 (c) PUBLIC INPUT.—The agency heads described 

20 under subsection (a) shall publish a request for informa21 tion to collect public input to inform the drafting of the 

22 report required under subsection (a). 


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1 SEC. 5. STUDY ON AI BENEFITS AND RISKS IN SECURING 

2 THE U.S. FINANCIAL SYSTEM FROM NA3 TIONAL SECURITY THREATS. 

4 (a) REPORT REQUIRED.—Not later than 180 days 

5 after the date of the enactment of this Act, the Secretary 

6 of the Treasury shall submit to the Committee on Finan7 cial Services of the House of Representatives and the 

8 Committee on Banking, Housing, and Urban Affairs of 

9 the Senate, and publish publicly, a report that examines— 

10 (1) realized and potential benefits and risks of 

11 AI technology, including— 

12 (A) the use of AI by financial institutions 

13 (as defined in section 5312(a) of title 31, 

14 United States Code) to meet the institutions’ 

15 obligations under the Bank Secrecy Act and 

16 sanctions laws; and 

17 (B) the use of AI by financial institutions 

18 to protect against cybersecurity threats and to 

19 respond to cybersecurity attacks; 

20 (2) statues, regulations, and agency guidance 

21 impacting development and use of AI by financial in22 stitutions to comply with the Bank Secrecy Act and 

23 sanctions laws; 

24 (3) current use cases of AI by the Department 

25 of the Treasury and areas where AI applications 


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1 would be uniquely suited but are not currently being 

2 deployed; and 

3 (4) any challenges the Department of Treasury 

4 has in leveraging AI and hiring or retaining staff 

5 with expertise in AI technology and potential solu6 tions to overcome such challenges. 

7 (b) RECOMMENDATIONS.—The report required under 

8 subsection (a) shall include regulatory proposals and legis9 lative recommendations that facilitate the responsible 

10 adoption of AI within the financial services industry. 

11 (c) PUBLIC INPUT.— 

12 (1) The Secretary shall publish a request for in13 formation to collect public input to inform the draft14 ing of the report required under subsection (a). 

15 (2) The Secretary shall consult with the Board 

16 of Governors of the Federal Reserve System, the 

17 Federal Deposit Insurance Corporation Board, the 

18 Comptroller of the Currency, the Director of the Bu19 reau of Consumer Financial Protection, and the Na20 tional Credit Union Administration Board to inform 

21 the drafting of the report required under subsection 

22 (a). 

23 SEC. 6. DEFINITIONS. 

24 In this Act: 


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1 (1) AI.—The term ‘‘AI’’ has the meaning given 

2 the term ‘‘artificial intelligence’’ under section 5002 

3 of the National Artificial Intelligence Initiative Act 

4 of 2020 (15 U.S.C. 9401). 

5 (2) BANK SECRECY ACT.—The term ‘‘Bank Se6 crecy Act’’ means— 

7 (A) section 21 of the Federal Deposit In8 surance Act (12 U.S.C. 1829b); 

9 (B) chapter 2 of title I of Public Law 91– 

10 508 (12 U.S.C. 1951 et seq.); and 

11 (C) subchapter II of chapter 53 of title 31, 

12 United States Code. 

Æ 


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