Statement for the Record before the House Financial Services Committee Hearing on "From Principles to Policy: Enabling 21st Century AI Innovation in Financial Services"

The American Bankers Association (ABA) appreciates the opportunity to provide a Statement for the Record for this hearing, From Principles to Policy: Enabling 21st Century AI Innovation in Financial Services. The ABA is the voice of the nation's $25.1 trillion banking industry, which is composed of small, regional and large banks that together employ over 2 million people, safeguard $19.7 trillion in deposits and extend $13.2 trillion in loans.

Banks are a unique sector already subject to an extensive compliance regime covering nearly all risks associated with artificial intelligence (AI), including fair lending and cybersecurity requirements. Federally regulated financial institutions undergo supervision, examination, and enforcement of their use of any technology, including AI. As such, the financial services sector is a model for how other industries can responsibly and effectively deploy AI at scale.

Introduction

There is a complex overlay of applicable laws, regulations, and supervisory guidance that is relevant to banks' AI usage. The most important of these are model risk management expectations issued from the Federal Reserve (Fed), the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC). In 2021, the Fed, the OCC, and the FDIC issued interagency guidance addressing model risk management to support Bank Secrecy Act/Anti-Money Laundering and Office of Foreign Assets Control Compliance (BSA/AML and OFAC).

Download the statement for the record to read the full text.