FinCEN Modernization Act of 2023

• Authority: United States Congress
• Parent authority: Federal government
• Jurisdiction: United States
• Collections: U.S. federal laws
• Most recent activity: Defunct
• Most recent activity date: 2025-01-03

Risk subdomain coverage

Minimal coverage — Brief mention but no specific mitigations, recommendations or governance measures relating to the risk subdomain are described.

• AI system security vulnerabilities
• Competitive dynamics

All other risk subdomains had no coverage in this document.

Risk Coverage Summary

This document has minimal coverage of AI risk domains, with limited implicit references to security vulnerabilities (2.2) through mentions of cyber and data security breaches, and competitive dynamics (6.4) through innovation facilitation language. The document primarily focuses on administrative and technological modernization of FinCEN rather than addressing specific AI risks.

Sector coverage

Good coverage — Comprehensive governance measures or mitigations with clear procedures relating to the sector are explicitly described.

• Finance & Insurance
• Public Administration (excl. National Security)

Minimal coverage — Brief mention but no specific mitigations, recommendations or governance measures relating to the sector are described.

• Information
• Scientific Research & Development Services

All other sectors had no coverage in this document.

Sectors Summary

This Act primarily governs the Finance and Insurance sector through FinCEN's regulatory oversight of financial systems, money laundering detection, and cryptocurrency monitoring. It also has secondary coverage of the Information sector through provisions addressing emerging financial technologies and data analytics.

Legislative Status

Hard Law

Legislative Status Summary

This is a binding federal statute enacted by the United States Congress with mandatory obligations on FinCEN, including requirements to establish programs, submit reports, and make written determinations.

Actors

Proposer

• Entity Types: AI_Governance_Actor
• Entities: United States Congress
• Summary: The document is an Act of Congress, as indicated by the legislative format and citation structure. Congress is the proposing authority for this federal legislation.

Target

• Entity Types: AI_Governance_Actor
• Entities: Financial Crimes Enforcement Network (FinCEN); developers; financial industry; self-regulatory organization
• Summary: The Act primarily targets FinCEN as the regulated entity with mandatory obligations. It also references developers and the financial industry as participants in the innovation exploration programs, and allows transactions with various entities including self-regulatory organizations.

Enforcer

• Entity Types: AI_Governance_Actor
• Entities: Committee on Banking, Housing, and Urban Affairs of the Senate; Committee on Financial Services of the House of Representatives; Director of FinCEN
• Summary: Congressional committees receive mandatory annual reports, providing oversight authority. The Director of FinCEN has internal enforcement authority through written determinations and approval of transactions.

Monitor

• Entity Types: AI_Governance_Actor
• Entities: Committee on Banking, Housing, and Urban Affairs of the Senate; Committee on Financial Services of the House of Representatives
• Summary: The same Congressional committees that enforce also monitor through the annual reporting requirement, which includes detailed information about transactions, justifications, and expenditures.

AI Lifecycle Stages

Lifecycle stages covered by the documents, as defined in the OECD Framework for the Classification of AI Systems

• Plan and Design
• Build and Use Model
• Verify and Validate
• Deploy
• Operate and Monitor

AI Lifecycle Summary

The document does not explicitly address specific AI lifecycle stages in a technical sense. It focuses on FinCEN's authority to research, develop, and acquire technologies including machine learning and data analytics, which implicitly touches on planning/design and deployment phases, but without detailed governance measures for each stage.

Technical Scope

Terms relating to technical scope that are mentioned or implicitly referenced in the document

No technical scope terms identified.

Technical Scope Summary

The document explicitly mentions machine learning and data analytics as technological advances relevant to FinCEN's mission. It does not use formal AI terminology like 'AI models,' 'AI systems,' or specific categories like frontier AI, general purpose AI, or foundation models. The focus is on practical financial technology applications rather than AI governance frameworks.