Regulators should focus on appropriate AI governance

July 1, 2021

CUNA recommends federal financial agencies continue to work with financial institutions on the use of artificial intelligence (AI) in the delivery of financial services it wrote in response to a joint agency request for information Thursday.

CUNA says the use of AI “remains in its nascent stages” with all but the largest credit unions, and its early deployment has been for use in member support applications.

“As the regulators seek to understand the use of AI by financial institutions, we agree that the focus of financial institutions should be developing appropriate governance, risk management, and controls over AI, or more specifically where technology using AI could create novel risks,” the letter reads. “We believe that AI doesn’t necessarily need to be categorized as a new risk by regulators, but rather that Agencies should focus on products or services where the use of AI might change processes or products significantly enough that the incremental risks might be difficult to understand.”

CUNA also:

  • Encourages NCUA, as it gains regulatory experience with AI, to focus efforts on areas where it can help credit unions understand and manage risk.
  • Encourages NCUA to look for ways to leverage other financial regulators’ efforts in understanding the AI driven products and services offered by vendors.
  • Suggests regulators also consider the impact of AI and ML models on customer disclosure requirements.