Federal Regulators' Artificial Intelligence Initiative Is A Promising Development For Financial Industry

Update: On May 17, 2021, the agencies extended the deadline for comments from June 1, 2021, to July 1, 2021. The text of this post has been updated accordingly.

The federal financial institutions regulatory agencies collectively issued a Request for Information and Comment (RFI) on March 31, 2021, to better understand how artificial intelligence (AI) and machine learning (ML) are used in the financial services industry and identify areas where additional "clarification" (possibly in the form of informal guidance or more formal regulation) could be useful.

Issued collectively by the Board of Governors of the Federal Reserve System (the Fed), the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency, the RFI seeks commentary on 17 questions centering on how financial institutions ensure quality of AI/ML outputs and manage model risk.