Leaders of the House Financial Services Committee (HFSC) called on the Treasury Department to focus on the potential benefits of artificial intelligence as the department considers how to regulate the use of the technology.
HFSC Chairman Patrick McHenry of North Carolina and all six subcommittee chairmen made the call in a letter that was addressed to Treasury Secretary Janet Yellen and was written in response to the Treasury Department’s request for information on AI in financial services, the HFSC said in a Friday (Aug. 16) press release.
“AI technologies are already being deployed across the financial services sector in areas such as fraud detection, underwriting, debt collection, customer onboarding, real estate, investment research, property management and customer service,” the letter said. “Continued adoption and further automation of services continue to result in significant cost reductions and greater access to financial services to more Americans.”
The letter said regulatory frameworks should recognize the importance of the relationships between third-party AI models and the smaller financial institutions that rely on them to remain competitive with larger institutions.
It added that consumers should have control over how their information is gathered and used by financial institutions so they can protect their privacy while also providing a framework for how that information can be used to fuel AI-driven advancements.
The letter added that the regulatory framework must be able to keep pace with the advancements in AI; should be developed by the primary regulators for each market because they understand their market; and should include collaboration with Congress, market participants, AI practitioners and modelers, and academics.
“The potential benefits of AI are vast, and with thoughtful activity-based regulation and collaboration between the public and private sectors, we can harness these benefits to create a more inclusive and efficient financial system for all Americans,” the letter said.
The Treasury Department issued its request for information June 6, saying the request encompasses “uses, opportunities and risks of artificial intelligence in the financial services sector.”
The agency said at the time that it aims to learn how AI is being used in the sector, what opportunities and risks it presents, what obstacles are slowing the responsible use of AI, and what enhancements can be made to legislative, regulatory and supervisory frameworks.
The Treasury Department added that it is especially interested in learning how AI can be used to deliver inclusive and equitable access to financial services.
The HFSC established a bipartisan Working Group on Artificial Intelligence in January, and the group issued a report in July describing the opportunities and risks presented by AI’s growing role in finance and housing.
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