FI regulators seek feedback on AI use
Federal financial regulators – including the NCUA – Monday issued a request for information (RFI) seeking insights into financial institutions' use of artificial intelligence (AI) and machine learning. NAFCU recognizes how these technologies can help improve credit unions' operations and service to members but has cautioned against an unlevel playing field that allows fintech companies to operate without proper oversight.
- appropriate governance, risk management, and controls over AI;
- challenges in developing, adopting, and managing AI; and
- whether any clarification would be helpful.
Comments will be due 60 days after the RFI is published in the Federal Register.
NAFCU last year provided feedback on the Office of Management and Budget's (OMB) draft memorandum providing guidance for regulation of AI applications, noting that although "AI holds promise for credit unions and their members, sustained innovation will depend on regulators’ commitment to facilitate and encourage experimentation."
The OMB's memo was addressed to all federal regulators, but NAFCU flagged that it could be received differently by independent agencies such as the NCUA. The association encouraged the NCUA to consider the memo and "chart its own path as it seeks to accommodate credit union innovation and utilization of new technologies."
NAFCU also offered support for regulators to reduce barriers to innovation by eliminating "outdated, unduly burdensome or ineffective regulation."
As more fintech companies take advantage of different strategies to sidestep financial regulation and enter the financial system as banks, NAFCU is leading efforts with regulators and lawmakers to ensure these fintech banks are operating on a level playing field with credit unions.
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