‘Balanced and flexible’ approach to AI will aid innovation, protect consumers
Credit unions collaborate and innovate using artificial intelligence (AI), and Congress should work to reduce barriers. In advance of a House Financial Services Subcommittee’s hearing on how AI and other technologies are shaping the future of finance, America’s Credit Unions President/CEO Jim Nussle shared the impact in a letter to lawmakers.
“From managing internal procedures to AI chatbots, to underwriting assistance and fraud detection— credit unions are seeing firsthand how AI is increasing staff efficiency, automating previously laborious tasks, reducing paperwork, and expediting loan decision making processes,” Nussle wrote, adding that AI-powered fraud analytics can enhance credit union efforts to prevent financial crime and reduce Bank Secrecy Act compliance costs.
Regulatory assessments of new technologies must embrace “balanced and flexible” approaches to risk management that can accommodate innovation while protecting consumers.
This means tailoring future AI-related actions in a way that distinguishes between its use by regulated versus unregulated institutions.
“For highly regulated financial institutions, such as credit unions, an appropriate regulatory framework should recognize the need for less prescriptive intervention and greater accommodation of innovation through pilot programs, no-action letters, waivers, and elimination of outdated rules,” Nussle wrote.
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