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The House Financial Services Committee Task Force on Artificial Intelligence (AI) held a hearing examining the use of AI within regulatory technology for the financial services industry Friday, where NCUA Director of the Office of Examination and Insurance, Kelly Lay, argued for the NCUA to gain additional authority to examine third party vendors. 

Ahead of the hearing, NAFCU Vice President of Legislative Affairs Brad Thaler reiterated opposition for granting the NCUA with this authority and explained that implementation of such authority would incur significant expenditures for the NCUA, that would ultimately be borne by credit unions and their 130 million members due to the fact that credit unions fund the NCUA budget.

Thaler also called on Congress to reject the Strengthening Cybersecurity for the Financial Sector Act, legislation recently introduced by Rep. Bill Foster, D-Ill., that would give both the Federal Housing Finance Agency and the NCUA additional third-party vendor examination authority. NAFCU has previously opposed this legislation and expressed concerns about the wide authority it would give the NCUA and the potential costs to credit unions.

Of note, the House Financial Services Committee will markup the Strengthening Cybersecurity for the Financial Sector tomorrow at 12:00 p.m. Eastern. NAFCU will heavily advocate on behalf of the industry to ensure this costly legislation does not impact credit unions. Stay tuned to NAFCU Today for the latest on this issue.