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The federal government shutdown has entered its fourth week with no breakthrough in sight. Upcoming military pay deadlines and warnings from 25 states that they may soon be unable to distribute SNAP benefits highlight the growing human and economic toll of the impasse. While the Administration has funded some programs and military pay to date, the next several days could prove pivotal as pressure builds in Washington.

At the same time, trade tensions continue to ripple outward. President Trump’s ongoing Asia trip includes a meeting with Chinese President Xi Jinping following a new framework on rare earth minerals and agriculture, even as new tariffs on Canada heighten industry concerns. Lawmakers from agricultural states report increasing frustration from farmers facing the effects of retaliatory tariffs.
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This blog is part of an occasional series of reviews of research reports that may be of value to IPA members. If you have research you’d like us to review or recommended reading, please reach out to Ben Jackson and let him know!

Cleaning off my desk the other day, I ran across a report on artificial intelligence from the Congressional Research Service that raises interesting questions for the payments industry.

“Generative Artificial Intelligence and Data Privacy: A Primer” was published in May 2023, but it still remains a worthwhile read today. The report covers what Generative AI is, how models get and use data, what happens to the data shared with Generative AI, and policy considerations for Congress.

The report is not focused on the financial services industry, but it raises important questions that executives should consider when building their AI strategies. Let’s look at each section and the questions it raises.

Defining Generative AI

In defining Generative AI, the report notes that the models produce content, including text, images, and videos. It also notes that most of today's attention focuses on general-purpose models trained on large amounts of data.

Financial services companies should consider whether a general-purpose model really fits the jobs they want to assign to AI. Hallucinations, in which general AI produces a false answer synthesized from vast amounts of data, are a real risk. Additionally, a model trained on too large a data set may use information that is not relevant. For example, a U.S. bank that wants to use AI to evaluate credit trends in particular sectors as part of the loan-making process probably wouldn’t want to include data from other continents.

The other side of the coin is that executives should ensure they understand the full capabilities of the tools they use. For example, could they train a chatbot to deliver both text and images to respond to customer queries and enhance the customer experience?

Understanding How Generative AI Uses Data

When discussing how generative AI uses data, the report notes that models require “massive amounts of data,” and that “some existing LLMs may reveal sensitive or personal information from their training data sets.”
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This means that financial companies need to know what is happening to the information that employees and customers are putting into their AI tools, especially if the AI is provided by a third party. Will providers use one company’s data to train models that help its competition? How much data does a model need to retain from each inquiry in order to stay current? Can the AI provider provide a walled garden for one company and how will the provider audit that? What disclosures should a company provide for its customers about how their interactions with AI will be recorded and used?

Considering Policy and Business Implications.

The report discussed some considerations for Congress, including imposing notice and disclosure requirements, opt-out requirements, and deletion requirements. It notes that the AI race may favor big companies who have the resources to build and manage models.

Companies should consider whether they can and want to train an AI model just on their in-house data. Another consideration is that even though AI is the buzzword of the moment, is it even necessary? Could a good statistical model run on a spreadsheet accomplish the same business goal that a company wants to assign to AI?

Remembering That Existing Laws Still Apply

Finally, it’s worth remembering that the current laws on the books still apply whether a company is using AI or not. Gramm-Leach-Bliley is specifically mentioned in the report. In other places, there has been talk about making sure that AI models do not run afoul of fair lending laws.

Executives should take the time to read this 8-page report and think about the questions it raises and how those might shape their AI strategies and implementations

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The federal government shutdown has entered its third week with no breakthrough in sight. The impasse, centered on healthcare provisions tied to a continuing resolution (CR), has left hundreds of thousands of workers without pay and triggered permanent layoffs across some agencies. Both chambers are feeling the strain, but leadership remains divided on how to end the standoff.

The Senate will reconvene this week for an unscheduled session to vote on the House-passed CR, while the House remains in recess under a 48-hour notice schedule. House Democratic Leader Hakeem Jeffries has recalled his caucus to Washington for a series of meetings focused on what he has termed a “Republican healthcare crisis.” Democrats plan coordinated events highlighting rising healthcare costs and calling for bipartisan negotiations.
Behind the scenes, a small group of Senators is seeking a compromise, though no agreement has surfaced.

Republican leadership continues to insist that the Senate act first on the House CR, but internal pressure is growing as the shutdown’s effects ripple through the economy.

With the shutdown dragging on, trade friction escalating, and redistricting battles unfolding in key states, the coming weeks promise to test both the political and economic resilience of Washington’s leaders.

Want the full story? IPA members receive OGR’s Big Picture each week with deeper analysis of Capitol Hill developments and their implications for the payments industry. Join the Innovative Payments Association to stay informed.

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As the government shutdown stretches into its second week, healthcare remains the central obstacle to a deal on a continuing resolution (CR). Informal Senate talks have yet to produce progress, and both parties remain confident in their political footing—for now.

The impact is beginning to spread: hundreds of thousands of federal employees have been furloughed, and airport delays are mounting as TSA and air traffic control personnel feel the strain. Meanwhile, Senate Republicans are preparing to confirm more than 100 Administration nominees this week, signaling a push to clear the executive branch backlog before Columbus Day.

Want the full story?

IPA members receive OGR’s Big Picture each week with in-depth analysis of what’s happening on Capitol Hill and what it means for the payments industry. If you’re ready to move beyond the headlines and understand how policy decisions could impact your business, join the Innovative Payments Association.