H.R. 1734: Preventing Deep Fake Scams Act

This bill, known as the Preventing Deep Fake Scams Act, aims to address concerns regarding the use of artificial intelligence (AI) in the financial services sector. It highlights both the potential benefits and risks associated with AI, particularly the threat posed by deep fake technologies, which can create realistic audio and video impersonations of individuals for malicious purposes.

Key Provisions of the Bill

Establishment of a Task Force

The bill establishes a Task Force on Artificial Intelligence in the Financial Services Sector. This task force will focus on issues related to the use of artificial intelligence in banks and credit unions, specifically looking at how it can both protect and pose risks to consumer accounts.

Task Force Membership

The Task Force will include several high-ranking officials from financial regulatory bodies, including:

• The Secretary of the Treasury or a designee, who will serve as Chair.
• The Comptroller of the Currency or a designee.
• The Chairman of the Board of Governors of the Federal Reserve System or a designee.
• The Chairperson of the Federal Deposit Insurance Corporation or a designee.
• The Director of the Bureau of Consumer Financial Protection or a designee.
• The Chairman of the National Credit Union Administration or a designee.
• The Director of the Financial Crimes Enforcement Network or a designee.

Report Requirements

The Task Force is required to submit a report to Congress within one year of the bill's enactment. This report must address several key areas, including:

• A description of how financial institutions are using AI to protect against fraud and security risks.
• Definitions of various types of AI technologies, including generative AI, machine learning, natural language processing, algorithmic AI, and deep fakes.
• An analysis of the risks posed by bad actors using AI for identity theft and fraud.
• A list of best practices for financial institutions to safeguard consumer data.
• Recommendations for regulations to protect against the misuse of AI in the financial sector.

Public Consultation

To gather insights, the Task Force must solicit public feedback within 90 days of the bill's enactment. It is also required to consult with various stakeholders, such as:

• Depository institutions and credit unions of different sizes.
• Third-party vendors that utilize AI.
• Experts in artificial intelligence.

Termination of the Task Force

After submitting the final report to Congress, the Task Force will be dissolved 90 days later.

Conclusion of Summary

The bill seeks to proactively address the implications of AI in finance, particularly focusing on preventing fraud facilitated by AI technologies. It recognizes the importance of input from industry stakeholders while establishing a framework for consumer protection through legislative efforts.

Relevant Companies

• GS - Goldman Sachs: As a major player in the financial sector, they may need to adapt to any regulations or practices derived from the task force's findings.
• JPM - JPMorgan Chase: As one of the largest banks, the use and regulation of AI in their operations may be directly influenced by this bill.
• COF - Capital One: Their implementation of AI for customer service may be affected based on the report and recommendations from the Task Force.
• MA - Mastercard: Could see changes in how they handle AI-driven security measures in response to potential regulations.
• V - Visa: Like Mastercard, they may alter their practices regarding AI in response to findings that arise from this legislation.