Financial regulators have yet to publish a comprehensive set of artificial intelligence (AI)-related rules, as most of the efforts have focused so far on guidelines and principles for financial institutions to make good use of AI. However, senior banking regulator officials warned on Friday (June 3) that existing regulation could also apply to AI.
Even without AI-specific guidance from federal bank regulators, institutions could violate existing rules, officials from the Federal Reserve and the Office of the Comptroller of the Currency (OCC) said on Friday in an event hosted by the New York Bar Association.
“There’s a lot of existing guidance,” said Kevin Greenfield, the deputy comptroller for operational risk policy at the OCC.
U.S. financial regulators haven’t yet issued a set of rules to guide banks and other institutions’ growing use of AI, a technology that has been deployed in applications as diverse as fraud monitoring, product pricing and loan applications. Customer protection agencies such as the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) have issued press releases warning about the adverse effects of algorithmic biases. In the case of the FTC, the agency has also taken enforcement actions limiting a company’s use of certain algorithms. The Financial crimes Enforcement Network (FinCEN) and the OCC have publicly encouraged companies and banks to use AI in their processes as the benefits outweigh its risks b
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