Financial Artificial Intelligence Risk Reduction Act or the FAIRR Act
This bill addresses the impact of artificial intelligence on financial markets.
The bill requires the Financial Stability Oversight Council to coordinate with agencies regarding threats to the financial system posed by artificial intelligence, including the use of false representations of the likeness, speech, or actions of persons to manipulate or to cause disruptions to financial markets. The council must report on its findings and make policy recommendations to Congress. After congressional review, the council must implement these recommendations.
The Securities and Exchange Commission is allowed to seek treble civil penalties for violations of federal securities exchange law that involve machine-manipulated media.
The bill establishes liability for a person who, directly or indirectly, deploys or causes to be deployed an artificial intelligence model involved in a securities law violation.
The bill also provides for the regulation and supervision of certain financial organizations and service providers. For example, if a credit union that is subject to examination by the Board of Directors of the National Credit Union Administration delegates the performance of certain activities and services, this delegation must be disclosed and is subject to regulation and examination by the board.
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