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  • White House orders DOJ and CFPB to better protect citizens’ sensitive personal data

    Privacy, Cyber Risk & Data Security

    On March 1, the White House released Executive Order 14117 (E.O.) titled “Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern” to issue safeguards against Americans’ private information. The E.O. was preceded by the White House’s Fact Sheet which included provisions to protect Americans’ data on their genomic and biometric information, personal health, geolocation, finances, among others. The E.O. shared how this data can be used by nefarious actors such as foreign intelligence services or companies and could enable privacy violations. Under the E.O., President Biden ordered several agencies to act but primarily called on the DOJ. The president directed the DOJ to issue regulations on protecting Americans’ data from being exploited by certain countries. The White House also directed the DOJ to issue regulations to protect government-related data, specifically citing protections for geolocation information and information about military members. Lastly, the DOJ was directed to work with DHS to prevent certain countries’ access to citizens’ data through commercial means and the CFPB was encouraged to “[take] steps, consistent with CFPB’s existing legal authorities, to protect Americans from data brokers that are illegally assembling and selling extremely sensitive data, including that of U.S. military personnel.”

    A few days before, the DOJ released its fact sheet detailing its proposals to implement the White House’s E.O., focusing on national security risks and data security. The fact sheet highlighted that our current laws leave open lawful access to vast amounts of Americans’ sensitive personal data that may be purchased and accessed through commercial relationships. In response to the E.O., the DOJ plans to release future regulations “addressing transactions that involve [Americans’] bulk sensitive data” that pose a risk of access by countries of concern. The countries of concern include China (including Hong Kong and Macau), Russia, Iran, North Korea, Cuba, and Venezuela. The DOJ will also release its Advance Notice of Proposed Rulemaking (ANPRM) to provide details of the proposal(s) and to solicit comments.

    Privacy, Cyber Risk & Data Security Federal Issues Department of Justice CFPB Executive Order Department of Homeland Security White House Big Data China Russia Iran North Korea Cuba Venezuela

  • U.S. Attorney General taps professor to lead new technology-focused roles

    Fintech

    On February 22, the U.S. Attorney General, Merrick B. Garland, announced that he tapped Jonathan Mayer to head the DOJ’s first Chief Science and Technology Advisory and Chief Artificial Intelligence (AI) Officer roles. The roles are housed in the DOJ’s Office of Legal Policy which is developing a team of technical and policy experts in technology-related areas important to the Department’s responsibilities. These topics include cybersecurity and AI with the aim to advise leadership and collaborate with other components across the Department and with federal partners on cutting-edge technological issues. As the first Chief Science and Technology Advisor, Mayer will contribute technical expertise on cybersecurity, AI, and emergent technology matters.

    The Chief AI Officer role was created pursuant to a presidential executive order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence. In this role, Mayer will work on intra-departmental and cross-agency efforts on AI and adjacent issues, and he will also lead the Justice Department’s newly established Emerging Technology Board, which coordinates and governs AI and other emerging technologies across the Department.

    Mayer has a PhD in computer science from Stanford University and a J.D. from Stanford Law School. Mayer is an assistant professor at Princeton University’s Department of Computer Science and School of Public and International Affairs where his research is focused on the intersection of technology, policy, and law with an emphasis in criminal procedure, national security, and consumer protection.

    Fintech Department of Justice Artificial Intelligence

  • White House provides three-month update on its AI executive order

    Federal Issues

    On January 29, President Biden released a statement detailing how federal agencies have fared in complying with Executive Order 14110 regarding artificial intelligence (AI) development and safety. As previously covered by InfoBytes, President Biden’s Executive Order from October 30, 2023, outlined how the federal government can promote AI safely and in a secure way to protect U.S. citizens’ rights.

    The statement notes that federal agencies have (i) used the Defense Production Act to have AI developers report vital information to the Department of Commerce; (ii) proposed a draft rule for U.S. cloud companies to provide computing power for foreign AI training, and (iii) completed risk assessments for “vital” aspects of society. The statement further outlines how the NSF (iv) managed a pilot program to ensure that AI resources are equitably accessible to the research and education communities; (v) began the EducateAI initiative to create AI educational opportunities in K-12 through undergraduate institutions; (vi) promoted the funding of a new Regional Innovation Engines to assist in creating breakthrough clinical therapies; (vii) the OPM launched the Tech Talent Task Force to accelerate hiring data scientists in the government, and (viii) the DHHS established an AI Task Force to provide “regulatory clarity” in health care. Lastly, the statement provides additional information on various agency activities that have been completed in response to the Executive Order. More on this can be found at ai.gov.

    Federal Issues Biden White House Artificial Intelligence Executive Order

  • Idaho Department of Finance publishes proposed rule changes on its Mortgage Practices Act

    On January 3, the Idaho Department of Finance published a bulletin on proposed rule changes to Vol. 23-10 of the Idaho Administrative Bulletin, specifically to section 12.01.10 – Rules Pursuant to The Idaho Residential Mortgage Practices Act; a redline of the bill’s section changes is here. According to the bill, the rule changes aim to “reduce regulatory burden by removing outdated requirements,” and the rulemaking changes were made pursuant to Executive Order 2020-01.

    There were several changes to the bill. First, the section on “Deceptive Advertising” was struck from the bill. Second, and under “Written Disclosures,” the portion on “Receipt of an Application” was struck from the bill. Third, and under “Prohibited Practices” and further under “Engage in Deceptive Advertising,” the proposed changes include the addition of two subsections: one on engaging in bait and switch advertising; and another on misleading someone to believe a solicitation is from a person’s current mortgage holder, or government agency, among others. Fourth, the section on “Borrowers Unable to Obtain Loans” was struck entirely.

    Licensing Consumer Finance Mortgages

  • FTC report details key takeaways from AI and creative fields panel discussion

    Federal Issues

    On December 18, the FTC released a report highlighting key takeaways from its October panel discussion on generative artificial intelligence (AI) and “creative industries.” As previously covered by InfoBytes, the FTC hosted a virtual roundtable to hear directly from creators on how generative AI is affecting their work and livelihood given the FTC’s interest in understanding how AI tools impact competition and business practices. The report presents a summary of insights gathered during the roundtable and explains the FTC’s particular jurisdictional interest in regulating AI. The report explains that the FTC has brought several recent enforcement actions relating to AI and how the use of AI can potentially violate Section 5 of the FTC Act, which “prohibits unfair or deceptive acts or practices and unfair methods of competition.” Additionally, the report mentioned how President Biden’s recent Executive Order on the Safe, Secure and Trustworthy Development and Use of AI (covered by InfoBytes here), encourages the FTC to leverage its existing faculties to protect consumers from harms caused by AI and to ensure competition in the marketplace.  The FTC’s report explains that it is appropriately taking such actions, both through enforcement actions and by gathering information. The Commission additionally stipulated that training generative AI on “protected expression” made by a creator without the creator’s consent or the sale of that generated output could constitute an unfair method of competition or an unfair or deceptive practice. The FTC added that this may be amplified by actions that involve deceiving consumers, improperly using a creator’s reputation, reducing the value of a creator’s work, exposing private information, or otherwise causing substantial injury to consumers. The Commission further warned that “conduct that may be consistent with other bodies of law nevertheless may violate Section 5.”

    Federal Issues FTC Artificial Intelligence Competition Consumer Protection FTC Act Unfair

  • President Biden issues Executive Order targeting AI safety

    Federal Issues

    On October 30, President Biden issued an Executive Order (EO) outlining how the federal government can promote artifical intelligence (AI) safety and security to protect US citizens’ rights by: (i) directing AI developers to share critical information and test results with the U.S. government; (ii) developing standards for safe and secure AI systems; (iii) protecting citizens from AI-enabled fraud; (iv) establishing a cybersecurity program; and (v) creating a National Security Memorandum developed by the National Security Council to address AI security.

    President Biden also called on Congress to act by passing “bipartisan data privacy legislation” that (i) prioritizes federal support for privacy preservation; (ii) strengthens privacy technologies; (iii) evaluates agencies’ information collection processes for AI risks; and (iv) develops guidelines for federal agencies to evaluate privacy-preserving techniques. The EO additionally encourages agencies to use existing authorities to protect consumers and promote equity. As previously covered by InfoBytes, the FCC recently proposed to use AI to block unwanted robocalls and texts). The order further outlines how the U.S. can continue acting as a leader in AI innovation by catalyzing AI research, promoting a fair and competitive AI ecosystem, and expanding the highly skilled workforce by streamlining visa review.

    Federal Issues Privacy, Cyber Risk & Data Security White House Artificial Intelligence Biden Executive Order Consumer Protection

  • Congressional Democrats urge White House to make AI principles mandatory

    Federal Issues

    On October 12, a coalition of more than two dozen Democratic senators and House members urged President Biden to make any anticipated executive order on how the federal government handles artificial intelligence (AI) technology binding on the federal government and those who receive federal funds, and not a mere statement of principles. “By turning the AI Bill of Rights from a non-binding statement of principles into federal policy, your administration would send a clear message to both private actors and federal regulators: AI systems must be developed with guardrails,” the Democrat’s letter states. Additionally, these legislators asked the president to incorporate the White House Blueprint for an AI Bill of Rights, a voluntary roadmap that identifies five principles intended to guide both the government’s and private companies’ design, use and deployment of automated systems fueled by AI (covered by InfoBytes here).

    Federal Issues Congress White House Artificial Intelligence

  • California governor signs executive order on GenAI

    State Issues

    On September 6, California Governor Gavin Newsom signed an Executive Order (E.O.) instructing state agencies to evaluate how generative artificial intelligence (GenAI) may impact the State and its residents. Specifically, the E.O. requires certain state agencies to provide a report to the Governor which will examine “the most significant, potentially beneficial uses” of GenAI tools by the state. The report must also discuss “the potential risks to individuals, communities, and government and state government workers” from GenAI tools. Certain California agencies, including the Department of Technology, must perform a “risk analysis of potential threats to and vulnerabilities of California’s critical energy infrastructure by the use of GenAI.” The E.O. also requires that the State issue “general guidelines for public sector procurement, uses, and required training for use of GenAI,” and consider pilots of GenAI projects to be tested in “sandboxes.” Lastly, the E.O. directs the State to pursue a formal partnership with certain California higher education institutions to study the impacts of GenAI and support its safe growth.

    State Issues California Executive Order Artificial Intelligence Supervision Governors

  • Biden E.O. labels China as a country of concern; Treasury issues ANPR

    Federal Issues

    On August 9, the White House announced that President Biden signed an Executive Order on Addressing United States Investments In Certain National Security Technologies and Products In Countries of Concern (E.O.). The President explained his view that some countries create national security risks by using particular technologies to advance their “military and defense industrial sectors” rather than civilian and commercial sectors. Biden stated that although open global capital flows substantially benefit the U.S., the E.O. stated that certain investments may “accelerate and increase the success of the development of sensitive technologies and products in countries that develop them to counter United States and allied capabilities.” The E.O. directs the Secretary of the Treasury to issue regulations that (i) prohibit U.S. persons from participating in specific transactions associated with particular technologies and products that present a significant and urgent risk to national security; and (ii) mandate U.S. persons to notify the Treasury about different transactions related to specific technologies and products that may contribute to the national security threat. The annex to the E.O. identifies China, including Hong Kong and Macau, as the sole nation warranting concern. The E.O. also requires the Secretary to communicate with Congress and the public regarding the E.O., consult with other agency leaders, assess whether to amend the regulations within one year, and provide reports to the President and Congress.

    The Treasury simultaneously issued an Advance Notice of Proposed Rulemaking, requesting public comment on the implementation of the E.O., along with proposed definitions of key terms, before the program goes into effect. Written comments may be submitted within 45 days here.

    Federal Issues Department of Treasury Biden Of Interest to Non-US Persons China Hong Kong Artificial Intelligence Executive Order

  • OFAC sanctions Mexico-based human smuggling organization

    Financial Crimes

    The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) recently announced sanctions pursuant to Executive Order 13581 against a human smuggling organization, and several individuals and entities in its support network. OFAC claimed the Mexico-based organization, Hernandez Salas transnational criminal organization (TCO), earns billions of dollars per year smuggling and creating false documentation for migrants. The leader of the TCO has been sanctioned, among four other supporters. OFAC reported that the individuals are currently incarcerated in Mexico and awaiting extradition to the U.S. for trial before a federal grand jury. Also sanctioned are two Mexican hotels that have taken part in the TCO’s smuggling operations. OFAC noted that the sanctions were pursued in close collaboration with Mexico’s Financial Intelligence Unit.

    As a result of the sanctions, all property and interests in property belonging to the sanctioned persons subject to U.S. jurisdiction are blocked and must be reported to OFAC. Additionally, “any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.” U.S. persons are also generally prohibited from engaging in any dealings involving the property or interests in property of blocked or designated persons.

    Financial Crimes Of Interest to Non-US Persons OFAC OFAC Designations OFAC Sanctions Department of Treasury SDN List Mexico

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