The American Bankers Association today offered four policy recommendations for Trump administration officials as they develop an “action plan” to advance the development and implementation of artificial intelligence technologies in the U.S.
President Trump in January signed an executive order directing the creation of the plan. In comments to the National Science Foundation, ABA noted banks are a model for how other industries can explore AI-enabled use cases in a fruitful and sustainable manner.
“The compliance requirements, model risk management expectations, and supervision by specialized regulators has resulted in an environment of trust and responsible innovation, a prerequisite for prosperity,” ABA said. “Accordingly, the financial services sector can be a leader to encourage the proliferation of these features. The framework under which banks operate can, with some clarifications and adjustments, effectively manage risk without endangering American dominance.”
ABA had four high-level policy recommendations:
- Congress must pass comprehensive laws establishing an AI risk management framework with strong preemptions of state requirements and which do not create duplicative or inconsistent obligations for banks.
- Agencies should identify clear regulatory outcomes and objectives, while enabling regulated entities the ability to deploy effective risk management techniques based on common sense and best practices. They should also have perspective on the entire AI ecosystem rather than merely isolating the regulated entities, and be transparent on whether they are using AI.
- The Federal Reserve, the Office of the Comptroller of the Currency and the FDIC should update model risk management guidance, subject to a notice and comment period. Also, field examiners must be trained not to focus on granular matters such as large language models’ code but rather on the inputs, outputs and outcomes of models.
- Policymakers should encourage adoption of voluntary standards and frameworks where possible in order to encourage cross-sector collaboration.
