State Artificial Intelligence Law and the Real Estate Finance Industry
In the absence of Congressional action, states have begun debating how to regulate artificial intelligence (AI) in earnest with legislative efforts broadly aimed across industries. In May 2024, Colorado became the first state to enact a statute governing these tools. MBA and its partner state and local associations are engaged in advocacy to ensure the specific needs of the real estate finance industry are considered in these debates and incorporated into any final policy. MBA created a document outlining Myths v Facts about the use of AI in the mortgage industry. Educating state legislator's on the use and purpose of these technologies is key to ensuring these policies do not interfere with the overall mortgage market.
For example, member companies often rely on AI tools they do not own nor control in order to extend sustainable mortgage credit to low- and moderate-income families through the affordable housing programs of the federal government. This includes AI tools developed or required by Fannie Mae, Freddie Mac, the Federal Housing Administration, the Department of Agriculture's Rural Housing Service, and the Veterans Administration's Loan Guarantee Program.
Given the reliance on federal tools, it is vital that state policy makers continue to allow their federal counterparts to manage these systems and not create any unintended consequences through a patchwork of state laws.
ENACTED
Colorado: Consumer Protections for Artificial Intelligence (May 17, 2024)
All Activity Related to State Artificial Intelligence Legislation
- May 17, 2024: Colorado Governor Jared Polis signs first in the nation legislation to regulate artificial intelligence (Consumer Protections for Artificial Intelligence). Read Governor Polis' signing statement expressing his reservations but also urging changes to the language before the February 1, 2026 effective date.
- May 16, 2024: MBA and the Colorado Mortgage Lenders Association send a veto request to Governor Polis noting that SB 24-205 fails to consider the totality of the real estate finance system.
- May 6 & 7, 2024: The General Counsel of the Federal Housing Finance Agency writes to the governors and legislative leaders of Connecticut and Colorado to express FHFA's regulatory authority over Fannie Mae and Freddie Mac and also explained the GSEs’ underwriting tools used by mortgage lenders.
- April 24, 2024: MBA background memorandum to the Connecticut Mortgage Bankers Association on industry use of artificial intelligence.
- April 9, 2024: MBA and California MBA send coalition letter with CA Bankers, CA Community Banking Network, and CA Credit Union League expressing opposition to AB 2930
- March 22, 2024: Rhode Island introduces SB 2888, which would require risk assessments on certain high-risk artificial intelligence systems
- March 18, 2024: Washington enacts AI Task Force bill, SB 5838, by request of the Attorney General. SB 5838 allows the task force to return with recommendations on legislation to regulate artificial intelligence
- March 7, 2024: New York introduces S8755 to create a New York Artificial Intelligence Commission, the Commission would provide ethical standards for businesses operating in New York
- February 27, 2024: MBA’s comments to a working session of the Washington House of Representative’s Consumer Protection and Business Committee regarding the industry’s use of automated valuation models and property data collectors.
- February 15, 2024: California introduces AB 2930, related to the use of automated decision tools - including an opt-out provision.
- February 9, 2024: Illinois introduces HB 5322, which would create the Illinois Commercial Algorithmic Impact Assessments Act
- February 8, 2024: Illinois introduces HB 5116, the Automated Decision Tools Act
- February 7, 2024: Connecticut proposes SB 2, An Act Concerning Artificial Intelligence
- February 7, 2024: Rhode Island introduces H 7521, creating requirements for developers and deployers of artificial intelligence with a private right of action
- February 5, 2024: Oklahoma introduces HB 3835, the Ethical Artificial Intelligence Act
- January 31, 2024: California introduces AB 2013, related to artificial intelligence and training data transparency
- January 19, 2024: Hawaii introduces SB 2524, which "would prohibit algorithmic decision-making from utilizing algorithmic eligibility determinations in a discriminatory manner"
- January 12, 2024: New York introduces S8209, a companion to the A8129, New York Artificial Intelligence Bill of Rights, introduced in October 2023
- January 9, 2024: Georgia introduces HB 890, to protect against discrimination by artificial intelligence and automated decision tools
- January 9, 2024: Virginia pre-files HB 747, Artificial Intelligence Developer Act
- January 9, 2024: Vermont introduces H 710 and H 711, creating oversight and liability standards for developers and deployers of high-risk artificial intelligence systems
- December 28, 2023: MBA & California MBA send a coalition letter with California Bankers Association & California Credit Union League conveying concerns over draft regulations under the California Privacy Protection Act relating to regulation of automated decision making technology
- December 14, 2023: Washington pre-files for introduction HB 1951, Promoting ethical artificial intelligence by protecting against algorithmic discrimination.
- October 9, 2023: MBA provides memorandum to the Washington Mortgage Bankers Association on the industry use of artificial intelligence and consideration of a draft proposed bill in the state
Related MBA Events
Real-World Artificial Intelligence: The TRUE Story
*This is a sponsored webinar. Please be advised your contact information will be shared with the sponsor.*Artificial Intelligence is more than a futuristic concept. The benefits to the mortgage industry already exist, including operational efficiency
*This is a sponsored webinar. Please be advised your contact information will be shared with the sponsor.*
Artificial Intelligence is more than a futuristic concept. The benefits to the mortgage industry already exist, including operational efficiency, the ability to scale up or down with rapid market changes, and improved loan quality. This webinar will examine how TRUE is utilizing AI across the entire lending lifecycle. It will include a demonstration of features for a product that is available to lenders today.
Date/Time
- Thursday, November 7 (2:00 PM - 3:00 PM ET)
Objectives
- Learn how AI capabilities are changing the mortgage industry
- Learn how your borrower loan data is the key to driving significant ROI
- Understand how AI can help make your business more adaptable to demand, enable an elastic workforce, and lead to more revenue, while providing a modernized customer experience
- Learn how AI is leveling the lending playing field, without the need for lending industry participants to have inhouse AI expertise
- What lenders should think about regarding their own AI needs and future strategies
Experience Level
- Entry-Level
- Intermediate
- Advanced
Speaker(s)
- Steve Butler, President and CRO, TRUE
- Matthew VanFossen, CEO, Absolute Home Mortgage Corp
- Richard Hill, VP, Industry Technology, Mortgage Bankers Association
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