November 3, 2023

The Financial Stability Oversight Council (FSOC) unanimously voted to issue final versions of a new analytic framework for financial stability risks and updated guidance on the Council’s nonbank financial company determinations process. The updated Guidance for Nonbank Financial Company Determinations (Nonbank Designations Guidance) sets forth the Council’s procedures for considering whether to designate a nonbank financial company for Federal Reserve supervision and prudential standards under section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). 

Secretary of the Treasury Janet Yellen delivered remarks on the framework and guidance and stated that the documents will help FSOC achieve greater public transparency and analytic rigor. 

Office of the Comptroller of the Currency (OCC) Acting Comptroller Michael Hsu issued a statement expressing strong support for the adoption of the guidance and analytic framework. 

Following President Biden’s issuance of the Executive Order on Safe, Secure, and Trustworthy Artificial Intelligence (EO), the Office of Management and Budget released for comment implementation guidance for the federal government. The draft policy on Advancing Governance, Innovation, and Risk Management for Agency Use of Artificial Intelligence (AI) establishes AI governance structures in federal agencies and aims to advance responsible AI innovation, increase transparency, protect federal workers, and manage risks from government uses of AI.

Meanwhile, the Commerce Department announced through the National Institute of Standards and Technology (NIST) that it will establish the U.S. Artificial Intelligence Safety Institute (USAISI) to lead the U.S. government’s efforts on AI safety and trust, particularly for evaluating the most advanced AI models. USAISI will support the directives assigned to Commerce in the EO. 

Relatedly, Vice President Kamala Harris delivered remarks on the future of AI at the U.S. Embassy in London, England. As part of her visit, Vice President Harris announced a series of new U.S. initiatives that build upon President Biden’s EO, including, among other things, a political declaration on the responsible military use of artificial intelligence and autonomy and a new funders initiative to advance AI in the public interest.

The U.S. Department of the Treasury’s (Treasury) Office of Foreign Assets Control (OFAC) sanctioned Ekaterina Zhdanova, a Russian national, for her role in laundering and moving funds using virtual currency on behalf of Russian elites.

The Consumer Financial Protection Bureau (CFPB) published a new analysis on state Community Reinvestment Act laws, highlighting how states ensure financial institutions’ lending, services, and investment activities meet the credit needs of their communities.

The Securities and Exchange Commission (SEC) subpoenaed PayPal over its dollar-backed stablecoin. The subpoena asked PayPal to produce documents tied to the project.

Commodity Futures Trading Commission (CFTC) Commissioner Caroline D. Pham, sponsor of the Global Markets Advisory Committee (GMAC), announced the agenda for the upcoming GMAC public meeting on Monday, November 6, from 9:00 a.m. (EST) to 12:00 p.m. (EST) at the CFTC’s Washington, D.C. headquarters.

Sen. Tim Scott, Ranking Member of the Senate Banking Committee, announced a framework for his legislative proposal, the Empowering Main Street in America Act.

The House Energy and Commerce Innovation, Data, and Commerce Subcommittee held a markup of 16 bills that address emerging technologies and AI, among other topics. Two bills focusing on junk fees advanced to the full committee, as well as legislation that would direct the Commerce Department and the Federal Trade Commission to study blockchain technology and digital tokens. 

Senate Finance Committee Chair Ron Wyden (D-OR) sent a letter to the Internal Revenue Service (IRS) asking the IRS to detail how proposed budget cuts would hamper efforts to crack down on funding for Hamas via “fake charities, cryptocurrency and other schemes.”

U.S. Senate Majority Leader Chuck Schumer (D-NY), Senators Mike Rounds (R-SD), Martin Heinrich (D-NM), and Todd Young (R-IN) hosted a third AI Insight Forum focused on the intersection of AI and the workforce and a fourth AI Insight Forum on the highest impact areas, including important topics like AI in the financial sector and health industry, and how AI developers and deployers can best mitigate potential harms.

Senate Banking Committee Sherrod Brown (D-OH) issued a statement on the conviction of FTX founder Sam Bankman-Fried, stating that the verdict is “a victory for everyone fighting fraud and scams in crypto.”

District of Columbia (DC) Attorney General Brian Schwalb announced a lawsuit against RealPage, Inc. (RealPage) and 14 of the largest residential landlords in the District for colluding to illegally raise rents for tens of thousands of DC residents by collectively delegating price-setting authority to RealPage, which used a centralized pricing algorithm to inflate prices, costing renters millions of dollars.

New York Governor Kathy Hochul announced that the New York State Department of Financial Services has amended its cybersecurity regulations to enhance cyber governance, mitigate risks, and protect New York businesses and consumers from cyber threats.

The Biden Administration issued its Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (EO). The EO issues directives to over twenty federal agencies to monitor the risks of artificial intelligence (AI) and develop new use cases for AI while aiming to protect workers and consumers.

The Office of Management and Budget released draft guidelines for federal agencies to implement the EO. The guidance directs agencies to designate chief AI officers to coordinate their respective department activities; expand reporting on how agencies use AI; establish internal mechanisms to coordinate with existing officials; and publish the agencies’ plans to comply with the guidance.

Separately, G7 leaders agreed on International Guiding Principles on Artificial Intelligence (AI) and a voluntary Code of Conduct for AI developers under the Hiroshima AI process. The European Commission issued a statement welcoming the agreement.

Need to catch up on what happened earlier this week? Check out our Midweek Update here