Ladies and Gentlemen:
The Bank Policy Institute[1] is writing to respond to the Request for Information on the Development of an Artificial Intelligence (AI) Action Plan issued by the Networking and Information Technology Research and Development National Coordination Office and National Science Foundation on behalf of the Office of Science and Technology Policy.[2] We welcome the opportunity to contribute to the development of an AI Action Plan for President Trump’s second Administration.[3]
BPI and its member banks are strongly committed to using artificial intelligence to improve the efficiency and sophistication of their systems and thereby advance the interests of U.S. consumers and businesses. As the Bipartisan House Task Force on Artificial Intelligence noted, “the financial services sector has employed artificial intelligence technologies for decades” across a variety of applications.[4]
Among AI’s most critical uses in the U.S. banking system is to counter the efforts of malicious foreign and domestic actors. Last year, the House Committee on Financial Services’ Bipartisan Working Group on Artificial Intelligence noted that fraud detection has been financial services’ top AI use case.[5] In certain instances, AI has reduced fraud activity[6] and investigation time[7] by half. Additionally, Treasury has emphasized AI’s significant benefits in anti-money laundering, countering the financing of terrorism, and sanctions compliance.[8] Overly burdensome AI examination of banks has significantly hindered these efforts to use AI to defend the U.S. financial system and thus made it more difficult to combat foreign threats.
Banks’ use of AI goes beyond risk mitigation and benefits banks and their customers. Recently, BPI cataloged bank use cases of traditional and generative AI, such as using generative AI to scan news articles to assist employees in creating thematic investing indexes or using traditional AI to recommend the best action or product for customers based on historical and other relevant data.[9] The BPI membership continues to develop cutting-edge use cases, such as considering partnerships to use agentic AI for consumer loan origination and generative AI to simplify commercial card requests.
Banks have long made risk management a core pillar of their operations, integrating it into financial, operational, cyber, and emerging technology strategies. Their robust governance structures and independent risk functions ensure continuous oversight through internationally recognized frameworks. This extends to IT risk management, including AI, where banks apply rigorous third-party risk protocols, cybersecurity measures, and compliance mechanisms. AI-related risks—such as bias, fairness, and explainability—are managed within established enterprise risk frameworks, just as banks handle credit, market, and operational risks.[10]
When banks use AI, whether traditional or generative, or any other emerging technology, they must adhere to an oppressive regulatory and supervisory framework that does not exist for other industries. Federal Reserve Governor Michelle Bowman recently stated that, though AI “is on the frontier of technology, it does not operate outside the existing legal and regulatory framework”; in fact, “[w]hen AI is deployed in a bank, an even broader set of requirements may apply.”[11] While this framework can help effectively manage risks, its cumulative effect can stifle innovation and overlook the risks of not innovating and deploying new technology fast enough. As Vice President J.D. Vance noted, “[E]xcessive regulation of the AI sector could kill a transformative industry just as it’s taking off.”[12] Eliminating government mandates that divert bank resources away from managing material risks and driving innovation should be part of the Administration’s campaign “to encourage pro-growth AI policies.”[13]
Banking services underlie a significant portion of economic activity and are essential to the commercial transactions and financial relationships that support U.S. economic growth and national security. Any comprehensive plan for U.S. AI dominance must recognize banks’ central role in national success. To maintain and strengthen U.S. AI dominance, banks must not only adopt AI without excessive controls but have the freedom and incentives to drive AI innovation. Therefore, we urge the Administration to adopt the following as high-priority policy actions for its AI Action Plan.
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[1] The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks, and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.
[2] Request for Information on the Development of an Artificial Intelligence (AI) Action Plan, 90 Fed. Reg. 9,088 (Feb. 6, 2025), https://www.federalregister.gov/documents/2025/02/06/2025-02305/request-for-information-on-the-development-of-an-artificial-intelligence-ai-action-plan.
[3] This document is approved for public dissemination. The document contains no business-proprietary or confidential information. Document contents may be reused by the government in developing the AI Action Plan and associated documents without attribution.
[4] Report on Artificial Intelligence, BIPARTISAN H. TASK FORCE ON ARTIFICIAL INTELLIGENCE, 118th Cong., at xviii (Dec. 2024), https://republicans-science.house.gov/_cache/files/a/a/aa2ee12f-8f0c-46a3-8ff8-
8e4215d6a72b/6676530F7A30F243A24E254F6858233A.ai-task-force-report-final.pdf (“House AI Report”).
[5] AI Innovation Explored: Insights into AI Applications in Financial Services and Housing, Staff Report, BIPARTISAN WORKING GROUP ON ARTIFICIAL INTELLIGENCE, H. COMM. ON FIN. SERVS., 118th Cong., at 15 (July 18, 2024),
https://financialservices.house.gov/uploadedfiles/bipartisan_working_group_on_ai_staff_report.pdf (“HFSC AI Report”).
[6] Managing Artificial Intelligence-Specific Cybersecurity Risks in the Financial Services Sector, U.S. DEP’T OF THE TREASURY, at 3 (Mar. 2024), https://home.treasury.gov/system/files/136/Managing-Artificial-Intelligence-Specific-Cybersecurity-Risks-In-The-Financial-Services-Sector.pdf.
[7] HFSC AI Report, supra note 5, at 10.
[8] House AI Report, supra note 4, at 229.
[9] See Joshua Smith, Comment on U.S. Treasury Request for Information on Uses, Opportunities, and Risks of Artificial Intelligence in the Financial Services Sector, BANK POLICY INSTITUTE, at 4–8 (Aug. 12, 2024), https://bpi.com/wp-content/uploads/2024/08/BPI-Treasury-AI-RFI-Response-2024-4878-9975-4705-v10.pdf.
[10] For a discussion of banks’ extensive AI risk management, see Navigating Artificial Intelligence in Banking, BITS, BANK POLICY INSTITUTE (April 8, 2024), https://bpi.com/navigating-artificial-intelligence-in-banking/.
[11] Gov. Michelle Bowman, Artificial Intelligence in the Financial System, Remarks at the 27th Annual Symposium on Building the Financial System of the 21st Century, FEDERAL RESERVE (Nov. 22, 2024),
https://www.federalreserve.gov/newsevents/speech/bowman20241122a.htm; see also House AI Task Report, supra note 4, at 229 (“The use of AI does not absolve regulated entities from complying with applicable laws and regulations.”)
[12] Vice President J.D. Vance, Remarks by the Vice President at the Artificial Intelligence Action Summit in Paris, France, AMERICAN PRESIDENCY PROJECT (Feb. 11, 2025), https://www.presidency.ucsb.edu/documents/remarks-the-vice-president-the-artificial-intelligence-action-summit-paris-france.
[13] Id.
