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Biden issues executive order on AI
President Joe Biden Monday issued an executive order directing federal agencies to pursue new standards for artificial intelligence (AI) in support of safety and security, protecting Americans’ privacy, advancing equity and civil rights, promoting innovation and competition, and more.
The executive order explicitly calls for developing standards and best practices to protect consumers from AI-enabled fraud, enacting bipartisan data privacy legislation, evaluating the collection and use of consumers’ data, and providing clear guidance to ensure AI does not exacerbate discrimination in lending.
As technology has advanced, AI has become more of a focus for regulators to address the potential risks while ensuring proper guidance that supports innovation.
NAFCU recently called on the bureau to be transparent about its own use of AI in supervisory activities, raising concerns about the hazards of opaque decision-making that the executive order appears to acknowledge in its principle related to government use of AI. The order notes the use of AI can pose risks, such as discrimination and unsafe decisions, and directs the issuance of guidance for agencies’ use of AI, including clear standards to protect rights and safety.
Federal financial regulators sought feedback on AI use in 2021. NAFCU shared how “[c]redit unions are leveraging AI to support a variety of operational needs to better deliver safe and affordable services to their members,” including expanding access to high-quality credit among lower-income populations, while calling for “a supervisory approach that does not add to already high examination burden.”
The NCUA and other regulators have sought feedback on automated valuation models (AVMs) and reconsiderations of value (ROVs). The CFPB recently issued guidance on adverse action notices when using artificial intelligence.
NAFCU will continue to advocate for appropriate oversight of fintech that supports innovation, consumer protections, and a level playing field.