Artificial Intelligence Briefing: D.C. Hits Pause on Stop Discrimination by Algorithms Act of 2021

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Authors: Scott M. Kosnoff , Kacey E. Stotler , Hannah Reichenbach Coe

Our latest briefing explores a suspension of activity on the Stop Discrimination by Algorithms Act of 2021, an IAIS discussion on discrimination in advertising, and the anticipated release of a U.S./EU AI roadmap.

Regulatory and Legislative Developments

Stop Discrimination by Algorithms Bill on Pause: On November 17, 2022, DC Council Committee Chair Robert White announced that the DC Committee on Government Operations and Facilities will suspend activity on B24-0558, the “Stop Discrimination by Algorithms Act of 2021.” Chair White stated that “there is not enough time before the end of the Council period to move this bill forward in a way that effectively bars harmful discrimination without substantially disrupting the central and often positive role that algorithms play in broad swaths of our economy.” Chair White also announced his commitment to advance this bill in the first quarter of 2023.
IAIS Recap: The International Association of Insurance Supervisors (IAIS) Annual Conference in Santiago, Chile featured several developments related to artificial intelligence and machine learning. The IAIS FinTech Forum expects to release an AI/ML report later this year and begin studying regulatory initiatives next year. A session on diversity, equity and inclusion identified insurers’ advertising practices as a topic that may warrant regulatory scrutiny as several panelists, including Director Chlora Lindley-Myers (Missouri Department of Insurance and NAIC President-Elect), gave examples of historically underrepresented populations being excluded from advertising campaigns. Discussions are likely to continue on these topics at the IAIS Global Seminar in Seattle next June.
U.S. Treasury Says FinTech Industry Needs Additional Oversight: On November 16, the Treasury Department released a report entitled “Assessing Impacts of New Entrant Non-bank Firms on Competition in Consumer Finance Markets.” While noting that “there is some evidence that developments in underwriting are helping to reduce discrimination,” the report finds that such “evidence is limited and there are concerns about the potential of poorly designed AI/ML applications in particular to perpetuate or enable new forms of discrimination.” The report notes that the risks posed by AI/ML are not limited to non-bank firms, and that “all firms leveraging AI/ML technologies should be aware of bias and discrimination risks.” Finally, the report says that robust testing and ongoing monitoring are necessary to combat these risks.
U.S. and EU AI Roadmap: The U.S. and the European Union are expected to announce an AI roadmap at the December 5 U.S.-EU Trade and Technology Council meeting in Washington. The road map will likely prioritize risk management and security and seek to ensure that new technologies are used in ways that are consistent with shared democratic values and free-market principles.
U.K. Software and AI Roadmap Guidance Published: On October 17, the U.K. Medicines and Health products Regulatory Agency (MHRA) published its Guidance on “Software and AI as a Medical Device Change Programme – Roadmap” setting out how it will regulate software and AI medical devices in the U.K. by balancing patient protection and providing certainty to industry. For details, check out Faegre Drinker’s client alert written by Huw Beverley-Smith, Charlotte H N Perowne and Paige Izquierdo.