Bipartisan bill targets deepfake scams in financial sector

Rogers is the “data wrangler” at BillTrack50. He previously worked on policy in several government departments.

IssueVoter is a nonpartisan, nonprofit online platform dedicated to giving everyone a voice in our democracy. As part of its service, IssueVoter summarizes important bills passing through Congress and sets out the opinions for and against the legislation, helping us to better understand the issues.

BillTrack50, which partners with IssueVoter on this project, offers free tools for citizens to easily research legislators and bills across all 50 states and Congress. It also offers professional tools to help organizations with ongoing legislative and regulatory tracking.

Based on our combined work, I will explore deepfake scams in the financial sector.

Following on our in-depth look at artificial intelligence legislation, we're looking at the Preventing Deep Fake Scams Act. Deepfakes are videos of a person that are digitally altered so they appear to be someone else, which creates the possibility of misleading the viewer. Most legislation around deepfakes concerns their use in nonconsensual pornography or to affect the outcome of an election.

This bill is unusual in that it attempts to tackle deepfake use in committing fraud, by establishing the Task Force on Artificial Intelligence in the Financial Services Sector. The task force will explore the benefits to financial institutions as well as the risks to consumer account security and will be chaired by the secretary of the treasury or a nominee. If the bill passes, the task force will be required to produce a report to Congress within a year that will include advice to financial institutions on how to prevent such fraud and also advice to Congress on how to regulate it effectively.

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IssueVoter quotes proponents of the bill (the Democratic and Republican sponsors) who highlight the fast-changing nature of the risks that deepfake technology will make identity theft and fraud easier. It also looks at the need for policy makers to understand these risks to be able to create effective safeguards. Opponents of the bill (from the financial sector) cite the benefits and uses of AI to increase productivity and add value, as well as in actually fighting fraud.

The bill was introduced in the House on Sept. 28, 2023, and has been referred to the Financial Services Committee. It's difficult to predict its chances of success, given the current legislative logjam in Congress but, given its bipartisan nature and modest scope, it might manage to become law.

Other AI legislation

Looking at deepfake and AI legislation more broadly, this stakeholder page details 17 of the most interesting pieces of state and federal legislation that actually become law between 2019 and 2022. The National Defense Authorization Act of 2021 requires the Department of Homeland Security to issue an annual report on deepfakes for five years, but with a broader remit than just the financial sector. The first report (from January 2023) serves more as a baseline assessment of the technologies and risks, with more meaty content to come.

On a state level, Virginia was the first to legislate against deepfakes with SB1736 in 2019, with both California and Texas following suit and passing laws prohibiting the use of deepfakes to influence elections. California also passed a law prohibiting the use of deepfakes in pornography without the explicit consent of the subject.

In 2023, many states introduced AI legislation. Here's a stakeholder page detailing deepfakes bills and another setting out bills aimed at regulating their use during election campaigns.

Six states have enacted legislation. Louisiana, Minnesota, New York and Texas have enacted legislation creating offenses for producing and distributing nonconsensual deepfake pornography. Michigan has enacted four pieces of legislation, aimed at creating offenses for distributing deceptive media, regulating campaign advertising, to define artificial intelligence for this purpose and to provide sentencing guidelines. Washington enacted SB5152, defining synthetic media in campaigning and outlines penalties for improper use (for example, where an appropriately prominent disclaimer was not included).