WASHINGTON—Both NAFCU and CUNA have offered their input on how credit unions can leverage artificial intelligence and how they believe regulators can work with the industry on the technology.
The comments were filed in response to a request for information from the federal financial regulators regarding credit unions’ use of AI, including NCUA.
"Credit unions are leveraging AI to support a variety of operational needs to better deliver safe and affordable services to their members,” wrote NAFCU’s Senior Counsel for Research and Policy Andrew Morris. “Common business functions that integrate AI solutions include underwriting, risk management, marketing, and automation of customer service operations."
Morris said NAFCU supports regulators allowing credit unions to create pilot programs that provide safe harbors for specific AI applications, and recommended NCUA form a working group of credit union industry stakeholders to pursue targeted solutions to leverage AI.
Morris said “credit unions are committed to pursuing responsible innovation, but to meaningfully pursue AI and ML technologies requires a supervisory approach that does not add to already high examination burden.”
Read NAFCU’s full comments to the financial regulators here.
CUNA’s Comment
In its comment letter, CUNA said it recommends federal financial agencies continue to work with financial institutions on the use of AI in the delivery of financial services.
CUNA said the use of AI “remains in its nascent stages” with all but the largest credit unions, and its early deployment has been for use in member support applications.
“As the regulators seek to understand the use of AI by financial institutions, we agree that the focus of financial institutions should be developing appropriate governance, risk management, and controls over AI, or more specifically where technology using AI could create novel risks,” the letter reads. “We believe that AI doesn’t necessarily need to be categorized as a new risk by regulators, but rather that agencies should focus on products or services where the use of AI might change processes or products significantly enough that the incremental risks might be difficult to understand.”
Other Points Raised
CUNA said it also:
- Encourages NCUA, as it gains regulatory experience with AI, to focus efforts on areas where it can help credit unions understand and manage risk
- Encourages NCUA to look for ways to leverage other financial regulators’ efforts in understanding the AI driven products and services offered by vendors
- Suggests regulators also consider the impact of AI and ML models on customer disclosure requirements