H.R. 8671 — what changed

changed Advanced fraud detection technology— The term advanced “advanced fraud detection technology includes technology” means emerging technologies used to detect, prevent, or mitigate financial fraud and scams, including artificial intelligence, machine learning, predictive analytics, behavioral biometrics, network analytics, data fusion tools, distributed ledger-based monitoring tools, and blockchain tracing tools, and other emerging technologies used to detect, prevent, or mitigate financial fraud.tools.

changed Credit union— The term “credit union” means a State credit union or Federal has the meaning given the term “insured credit union, as such terms are defined, respectively, union” in section 101 of the Federal Credit Union Act (12 U.S.C. 1752).

changed In general— The Federal banking agencies, in consultation with the Secretary of the Treasury, the Financial Crimes Enforcement Network, the Federal Trade Commission, the Bureau of Consumer Financial Protection, the Federal Communications Commission, and other appropriate Federal and State government agencies, including appropriate law enforcement agencies, shall jointly conduct a comprehensive study on the use of advanced fraud detection technology by insured depository institutions and credit unions.

changed Current use and effectiveness— The current use and effectiveness of advanced fraud detection technology, including—technologies, including–

changed measurable outcomes relating to fraud detection, prevention, loss reduction, loss mitigation, privacy, and consumer protection; andprotection;

changed barriers to adoption, including cost, interoperability constraints, regulatory uncertainty, adoption and considerations of interoperability, data access limitations, access, liability, error rates, and liability concerns.regulation; and

changed Community financial institution access— Community financial institution (that is either an insured depository institution or credit union) access to advanced fraud detection technology, including—

changed challenges faced by community financial institutions in accessing or deploying advanced fraud detection tools;tools, including unique challenges faced by various types of community financial institutions;

changed whether economies of scale disadvantage smaller community financial institutions relative to large community in general, or certain types of smaller financial institutions;

changed the use by insured depository institutions and credit unions of artificial intelligence and machine learning models, applications, and tools in detecting fraud patterns, anomalies, synthetic identity fraud, and real-time payment fraud;

changed interactions between fraud detection models steps Federal banking agencies can take in coordination with other relevant government agencies and consumer protection laws.the private sector to ensure access by insured depository institutions and credit unions, including community financial institutions and their third-party vendors, to such models, applications, and tools.

changed what benefits and risks arise from existing supervisory expectations with respect to innovations in fraud detection and prevention, including whether existing supervisory expectations create barriers to innovation;innovation while maintaining relevant safeguards;

changed the need for interagency guidance, regulatory clarity, or safe harbors to support technology adoption;adoption in a manner that promotes fraud detection and prevention consistent with consumer protection, privacy, safety and soundness, and national security;

changed Report— Not later than 18 months after the date of enactment of this Act, the Federal banking agencies shall issue a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate containing all findings and determinations made in carrying out the study required under this section, and make such report publicly available, except for classified or supervisory information.available.

changed Recommendations—Classified annex— The A report required under paragraph (1) shall include legislative, regulatory, or supervisory recommendations which may include—include a classified annex, if applicable, provided to the committees.

changed In general— Not later than 1 year after submission of the study report required under section 3, 3(c), the Federal banking agencies may jointly establish a voluntary pilot program to facilitate community financial institution access for insured depository institutions and credit unions with less than $10,000,000,000 in total consolidated assets to advanced fraud detection tools.