2023-07-19 08:31:21
Lima, 19/07/2023 01:12 a. m.
The top US banking regulator says lenders need to make sure artificial intelligence tools don’t perpetuate bias and discrimination in credit decisions.
Federal Reserve Vice President of Supervision Michael Barr said the central bank is working on its supervisory efforts around AI. He added that if used safely, the technology could have a positive impact on access to loans.
AI could harness data “at scale and at low cost to expand credit to people who might not otherwise be able to access it,” Barr said Tuesday in remarks prepared for the National Fair Housing Alliance conference in Washington. “While these technologies have tremendous potential, they also carry the risk of violating fair lending laws and perpetuating the very disparities they have the potential to address.”
Barr noted that machine learning and other types of artificial intelligence could amplify bias or errors in the data, or could make incorrect predictions. “There are also risks that the data used maps to a protected class and lacks a sufficient link to creditworthiness,” she said.
This week, Gary Gensler, head of the US Securities and Exchange Commission (SEC), issued warnings about the use of AI in finance. He said Monday that companies need to be mindful of how their use of AI may not be in line with securities rules. The proliferation of AI means that governments will likely have to revise regulations to maintain global financial stability, Gensler said.
ALSO READ: Fed Governor Proposes New Standards to Avoid Bank Failure
ALSO READ: SEC Has Authority Over Cryptocurrency, Says Chairman Gensler
Enjoy your Subscribers Club discounts as many times as you want thanks to your subscription to Management. More than 300 promotions are waiting for you, discover them Here. And if you are not yet a subscriber, purchase your plan HERE.
#Feds #Barr #risk #increasing #lending #bias #Economy #United #States #Markets #artificial #intelligence #Federal #Reserve #Technology #Michael #Barr #ECONOMY