The American Bankers Association (ABA) has submitted a formal response to the US House Financial Services Committee, calling for a uniform, risk-based federal regulatory framework for artificial intelligence in the financial sector. The move addresses the growing deployment of automated systems across credit underwriting, fraud detection, customer operations, and risk management.
A primary concern highlighted by the banking industry is the emerging threat of a fragmented regulatory landscape. As several US states introduce distinct and potentially conflicting AI legislation, financial institutions operating across state borders face significant legal uncertainty and operational compliance burdens. The ABA is urging Congress to establish federal preemption to create clear, nationwide standards.
The association emphasized that existing financial regulations, such as the Gramm-Leach-Bliley Act, already establish rigorous requirements for data privacy, governance, and model risk management. Rather than creating entirely separate bureaucratic structures, the ABA advocates for a technology-neutral modernization of established frameworks that evaluates AI deployment according to its concrete risk profile.
A cornerstone of the submission is the demand for a genuine level playing field across the entire financial ecosystem. The ABA stressed that non-bank entities, FinTech firms, and third-party software providers delivering AI-driven financial services often operate with less regulatory oversight. The association insists that these non-bank competitors must be held to identical supervision, consumer protection, and model validation standards as fully chartered banks.
The ABA's intervention comes at a critical moment as financial institutions rapidly scale their adoption of generative models and autonomous agents. The transparency, bias mitigation, and explainability of these algorithms are increasingly viewed as systemic stability issues. By demanding federal action, the banking sector seeks to ensure that oversight keeps pace with technological innovation while preventing regulatory arbitrage.