In a recent letter to the U.S. Treasury, America’s Credit Unions stress the importance of responsibly integrating AI in the financial sector, urging regulatory support without broad measures that may stifle innovation.
Credit Unions Advocate for Responsible AI Use in Financial Services
Washington, D.C. — The integration of artificial intelligence (AI) within the financial services sector, particularly amongst credit unions, was the core topic of a recent communication to the U.S. Treasury Department. The letter, dispatched from America’s Credit Unions, emphasises the importance of fostering a financial marketplace that allows credit unions to grow and innovate through the prudent application of AI.
Written by Andrew Morris, Director of Innovation and Technology at America’s Credit Unions, the correspondence responded to the Treasury’s request for information on the uses, opportunities, and risks associated with AI in financial services.
Morris conveyed strong support for non-regulatory approaches in supporting and assessing AI within the sector. He cautioned against broad regulatory measures tailored to general AI behaviours being applied to specific, already tightly regulated banking activities such as credit underwriting and customer service interactions. According to Morris, such actions could misrepresent AI’s level of independence and undervalue the robust risk management frameworks mandated by the National Credit Union Administration (NCUA) and other banking regulators.
“Policymakers should avoid developing guidance targeted at general AI behaviour with the intent of applying it to narrow and already highly regulated banking applications—such as credit underwriting or customer service interaction,” wrote Morris.
Morris pointed out that an environment featuring regulatory scepticism or hostility towards AI might adversely affect credit unions and their members. Highlighting AI’s demonstrable benefits, he noted its role in expanding access to credit for underserved and minority populations, reducing competitive barriers for smaller community institutions, and enhancing consumer protection in the realm of cybersecurity.
Morris categorised the “narrow AI” utilised by credit unions into three primary functions: underwriting support, risk management and financial crime prevention, and customer service enhancements. These applications, he argued, offer significant opportunities for improving the efficiency and reach of credit union services.
Further emphasising the commitment of credit unions to the safe and secure use of AI, Morris urged regulators to appreciate the existing legal frameworks that apply to AI technologies, advocating for a climate of acceptance rather than scepticism towards responsible AI innovation.
“Credit unions are committed to using AI safely, securely, and with the goal of helping their members meet their financial needs. Regulators should recognise the tech-neutral applicability of existing laws with the aim of signalling acceptance—rather than scepticism—of responsible AI innovation,” concluded Morris.
The detailed communication from America’s Credit Unions arrives at a pivotal moment as the financial services industry continues to navigate the evolving landscape of AI technology, seeking to balance innovation with regulatory compliance and risk management.
