CBA Urges Clear, Consistent Federal Framework to Support Responsible AI Innovation in Banking

WASHINGTON, D.C. - The Consumer Bankers Association (CBA) today responded to the U.S. House Financial Services Committee Democrats' Request for Information on Artificial Intelligence (AI) in Financial Services and highlighted how the safe, sound, and responsible adoption of the technology will fundamentally enhance the delivery of financial products and services, providing meaningful improvements to the retail banking experience.

Banks operate within a myriad of robust, time-tested regulatory frameworks anchored by principles that are fundamentally sound, vital to consumer protection, and technology-neutral. When regulators consistently apply these frameworks across all market participants, they can support both innovation and consumer safety. The rapid advancement of AI presents an important opportunity to modernize and evolve the existing regulatory frameworks, building upon the strong foundations already in place.

To achieve a strong regulatory balance, CBA recommends policymakers:

• Maintain Principles-Based, Technology-Neutral Frameworks Across All Market Participants: Recognize the valuable principles underpinning existing federal financial statutes and ensure all entities deploying AI in consumer financial markets are held to uniform standards.
• Establish Clear Federal Preemption and National Consistency: Congress must establish a clear federal AI standard (for both developers and deployers) that explicitly preempts conflicting state and local requirements as applied to federally regulated banking organizations, replacing a fragmented regulatory patchwork with strong, enforceable, nationally consistent protections implemented by federal banking agencies.
• Work with Industry to Right Size AI Risk Management Expectations: Building off of the progress in the prudential regulators' SR 26-2 MRM Guidance, collaborate with industry to refine a practical framework for AI models that removes the supervisory friction arising from forcing non-deterministic models into traditional validation frameworks, while retaining core principles such as risk-tailored oversight, continuous monitoring, and real-time validation.
• Work with Industry to Ensure that Supervision Expectations for Third-Party Risk Management are Appropriately Risk-Based: Recognize existing inconsistencies with risk-based guidance implementation, acknowledge the structural and contractual limitations banks face regarding vendor supply chain visibility, encourage standardized vendor data disclosures, and support clear boundaries for bank oversight. Additionally, Congress should amend the Bank Service Company Act to clarify federal banking agencies' appropriate, modernized examination and information-access authority over critical third-party service providers.
• Protect Consumers Across Emerging Payment Networks for Agentic Commerce: Existing payment regulations and private network rules generally apply to transactions initiated by consumer-authorized AI agents. It is unclear whether consumers benefit from similar protections when using emerging crypto-based payment rails, which creates significant risk.

To read the full response, click HERE.