ABA Comment Letter on RFI on AI and ML

Re: Request for Information and Comment on Financial Institutions’ Use of Artificial Intelligence, Including Machine Learning

To the Above-Listed Agencies:

The American Bankers Association (“ABA”) welcomes the opportunity to comment on the request for information and comment (“RFI”) on financial institutions’ use of artificial intelligence (“AI”), including machine learning (“ML”), by the Board of Governors of the Federal Reserve System (“FRB”), Bureau of Consumer Financial Protection (“CFPB”), Federal Deposit Insurance Corporation (“FDIC”), National Credit Union Administration (“NCUA”), and Office of the Comptroller of the Currency (“OCC,” collectively the “Agencies”)

This RFI is a timely look at an important issue. Banks are actively evaluating ways to safely and responsibly integrate AI solutions to better serve customers and communities across the country. ABA believes AI holds tremendous opportunity to make financial services safer, more convenient, and more inclusive. This opportunity can only be realized when AI is implemented responsibly and the risks associated with AI are well managed. Fortunately, banks are moving carefully to avoid any unintended consequences and banking regulations today already capture the risks associated with AI. Regulators should focus on areas where they can provide clarity to allow banks to adopt AI and ensure that all financial services providers are held to this same high standard.Our main points with respect to the RFI, which are discussed at greater length below, are as follows:

• Banks are highly regulated and supervised and existing regulation and examination procedures well capture the risks of using AI and ML. As a result, new banking regulations are not necessary or warranted to address AI.
• The Agencies should consider areas where they can clarify existing regulations and supervisory guidance to address the risks and opportunities associated with AI and related technologies to help ensure that banks can continue to bring innovative services to consumers and communities in a safe and responsible manner.
• Because innovation is happening at banks and non-banks alike, the Agencies should ensure that rules are applied consistently to ensure that consumers remain protected wherever they choose to receive their financial services.
• Since banks often have more than one regulator, it is important for the Agencies to take a coordinated approach that fosters innovation and gives banks clarity about how to safely and responsibly implement technologies and move forward with confidence.
• Expectations regarding the use of AI and ML, particularly with respect to explainability, should be framed in the context of the relative risk and importance of the specific use case in question.
• While banks currently manage fair lending risk in the use of AI, in order to support adoption of AI additional clarifying guidance is needed on how to manage disparate impact risks effectively.
• The Agencies should create and encourage participation in pilot or innovation programs in connection with banks’ use of AI and ML approaches, as appropriate, although the utilization of such programs should be voluntary

For more, please download the full letter.