The American Bankers Association today submitted bank-specific recommendations on policy and regulation of artificial intelligence as the Trump administration seeks to make the U.S. a leader in the technology.
Earlier this year, the White House Office of Science and Technology Policy issued a request for information regarding regulatory reforms to promote AI development. In a letter, ABA noted that banks are already subject to an extensive compliance regime covering nearly all risks associated with AI, including fair lending and cybersecurity requirements.
“Federally regulated financial institutions undergo supervision, examination and enforcement of their use of any technology, including AI,” ABA said. “For example, banks are subject to model risk management guidance.”
ABA made the following recommendations:
- Supervisory guidance on model risk management predates technological advances and should undergo updates, subject to notice and comment, to account for current market practices and internal controls.
- Banking agencies must continue to revamp their examination procedures in order to foster a regulatory environment that supports responsible innovation.
- Policymakers should encourage the development of voluntary standards and certification programs within the AI supply chain to allow for appropriate due diligence. Developers and deployers should not have to choose among explainability, risk management, and commercial best practices. Over time, these voluntary programs will mature into federated AI Centers of Excellence providing value to banks of all sizes as well as the broader ecosystem.
- Congress must assert its authority over AI policy in order to protect interstate commerce from a patchwork of state laws and ensure U.S. leadership in this vital sector of the global landscape. At the same time, these federal laws must not create duplicative or inconsistent requirements for the highly regulated banking industry.
