By 
Leaders of the House Financial Services Committee (HFSC) have urged the Treasury Department to prioritize the potential benefits of artificial intelligence (AI) as it considers regulatory approaches for the technology’s use in the financial sector.
In a letter addressed to Treasury Secretary Janet Yellen, HFSC Chairman Patrick McHenry of North Carolina and the six subcommittee chairmen highlighted the transformative impact AI is already having across the financial services industry. The letter was written in response to the Treasury Department’s request for information on AI in financial services, according to an HFSC press release issued on Friday (Aug. 16).
“AI technologies are being integrated across various areas within the financial services sector, including fraud detection, underwriting, debt collection, customer onboarding, real estate, investment research, property management, and customer service,” the letter stated. “As AI adoption continues and services become more automated, we see significant cost reductions and enhanced access to financial services for a broader segment of Americans.”
The HFSC leaders emphasized that any regulatory frameworks developed should acknowledge the critical relationship between smaller financial institutions and third-party AI models, which are essential for these institutions to remain competitive with larger players.
The letter also underscored the importance of consumer privacy, advocating for a regulatory environment that allows consumers to control how their data is collected and used. This approach would protect individual privacy while also fostering AI-driven advancements in the financial sector.
The HFSC stressed that regulation must keep pace with the rapid advancements in AI and should be crafted by the primary regulators for each market segment, as they possess a deeper understanding of their specific markets. The letter called for a collaborative approach that involves Congress, market participants, AI experts, and academic researchers.
“The potential benefits of AI are immense,” the letter concluded. “Through 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 Treasury Department issued its request for information on AI on June 6, seeking insights into the uses, opportunities, and risks associated with AI in the financial services sector. The department aims to understand how AI is being applied, the challenges to its responsible use, and how legislative, regulatory, and supervisory frameworks can be improved to support its development.
Additionally, the Treasury is particularly interested in how AI can be leveraged to enhance inclusive and equitable access to financial services.
In January, the HFSC established a bipartisan Working Group on Artificial Intelligence, which issued a report in July outlining the opportunities and risks associated with AI’s growing influence in finance and housing.
Comments