Congress should establish a nationally harmonized, risk-based framework for regulating artificial intelligence in the financial services sector, which would preempt state laws while assuring strong consumer protection and cybersecurity outcomes, the American Bankers Association told House Financial Services Committee members.
Democrats on the House Financial Services Committee recently issued a request for information on AI risk and modernization in the financial services sector. ABA, in consultation with its AI Working Group, submitted answers to a lengthy list of questions posed by Democrats, ranging from AI adoption to the use of third-party providers.
In its answers, ABA stressed that Congress must act to supplement efforts by the administration to address cybersecurity challenges. The association also urged Congress to assert its leadership over AI to avoid a patchwork of state laws.
“These laws should create baseline standards that are not duplicative or inconsistent with the enterprise risk management obligations of banks,” ABA said.
ABA said that existing federal laws such as the Gramm-Leach-Bliley Act address AI risk in a technology-neutral manner. “The real challenge has to do with a level playing field,” it said. “Although banks and other depository institutions are supervised for compliance, other types of entities are not, even though they also deliver financial products and services.”
Ensuring the act’s obligations “are observed by all entities, regardless of what financial services they provide, would go a long way to protecting consumers and preventing data leakage and breaches,” ABA said.
