WASHINGTON— America’s Credit Unions is urging Congress and federal regulators to adopt a balanced approach to overseeing artificial intelligence in the financial sector, warning that overly rigid rules could stifle innovation at credit unions while leaving consumers unprotected.
In a letter sent to the House Financial Services Committee ahead of Wednesday’s hearing on enabling AI innovation in financial services, the trade association called for a regulatory framework that distinguishes between how AI is used by regulated financial institutions and by unregulated market players. Credit unions, the group said, need “less prescriptive intervention and greater accommodation of innovation through pilot programs, no-action letters, waivers, and elimination of outdated rules.”
Comment on Other Legislation
America’s Credit Unions also weighed in on several bills before the committee:
- The Unleashing AI Innovation in Financial Services Act (H.R. 4801), which would establish regulatory sandboxes at federal agencies for AI test projects. The group supports the legislation.
- The Artificial Intelligence Practices, Logistics, Actions, and Necessities (AI PLAN) Act (H.R. 2152), which would require multiple federal departments to develop a strategy to defend against AI-driven financial crime. America’s Credit Unions supports the bill and recommended expanding it to include financial regulators such as the National Credit Union Administration.
- A draft resolution promoting the use of AI in financial services and housing, citing its recognition of the resource constraints at rural and community-based institutions and its emphasis on tailored regulation and cost-benefit analysis before issuing AI-specific rulemakings.
The organization also urged lawmakers to further examine two additional measures scheduled for discussion, cautioning that they may have unintended impacts on smaller credit unions and the NCUA if advanced without additional scrutiny.
The letter can be found here.
.Simpson Meets With Sen. Scott
Separately, America’s Credit Unions President/CEO Scott Simpson met with Senate Banking Committee Chairman Tim Scott (R-SC) to discuss fundamental credit union issues.
“Meeting with Chairman Scott today underscored his deep commitment to credit unions and the members we collectively serve,” Simpson said in a statement. “Our partnership with Chairman Scott and the Senate Banking Committee is key to ushering through legislative priorities for our credit unions that will drive impact for years to come.”
The trade group noted that as chair of the Senate Banking Committee and a former credit union board member, Sen. Scott has supported several credit union issues, including his general support of the Credit Union Modernization Act.
America’s Credit Unions said Simpson also:
- Highlighted America’s Credit Unions’ support for the inclusion of Central Liquid Facility and Community Development Financial Institutions in the Senate’s version of the National Defense Authorization Act (NDAA).
- Stressed the need for statutory Consumer Finance Protection Bureau reform to ensure the Bureau is right-sized and credit unions are not unfairly expected to meet burdensome regulatory requirements.
Below, Scott Simpson, left, with Sen. Tim Scott.
