President Donald Trump issued an executive order (EO) aimed at creating a national policy framework for artificial intelligence (AI) on Dec. 11. The administration has positioned the order as a means of removing regulatory barriers to encourage AI adoption and innovation.
“It is the policy of the United States to sustain and enhance the United States’ global AI dominance through a minimally burdensome national policy framework for AI,” the EO states.
The EO directs the U.S. attorney general (AG) to establish an “AI Litigation Task Force” within 30 days of the order’s issuance “whose sole responsibility shall be to challenge state AI laws inconsistent with the policy” described in the order. This would include laws that AG determines “unconstitutionally regulate interstate commerce, are preempted by existing federal regulations, or are otherwise unlawful in the attorney general’s judgment.”
Within 90 days of the order, the U.S. secretary of commerce will be required to publish an evaluation of existing State AI laws that identifies “onerous laws that conflict with the policy.” The evaluation must be created in consultation with the U.S. special advisor for AI and Crypto, the assistant to the president for economic policy, the assistant to the president for science and technology and the assistant to the president and counsel to the president.”
The financial services industry expressed support for efforts to promote innovation by creating a clearer and more consistent regulatory regime around AI.
“Technology does not stop at a state border,” Mortgage Bankers Association President and CEO Bob Broeksmit said in a statement. “We believe strongly that a unified federal approach is necessary to avoid a confusing patchwork of state laws and regulations that would stifle innovation and raise compliance and borrower costs.
“For decades, MBA members have embraced evolving technologies — including early automated underwriting tools, advanced fraud detection systems, and modern data analytics — to improve the borrower experience and strengthen operational efficiency. AI represents the next phase of this long-standing commitment to innovation,” Broeksmit added. “We will work with policymakers on a legislative framework that builds on this executive order to provide durable guardrails, protect consumers, strengthen the mortgage system, and support a competitive marketplace. A clear federal framework will give lenders and technology partners the certainty needed to deploy AI safely and responsibly.”
In October, the Independent Community Bankers of America (ICBA) argued there is a need for a “clear, harmonized view of what ‘good’ looks like for AI design, validation, monitoring, explainability, vendor oversight, and examiner expectations,” in a letter responding to a request for information published by the Office of Science and Technology Policy regarding regulatory reform concerning AI.
“Community banks view AI as a practical tool to enhance operations and decision-making. On the defensive side, AI can help detect anomalous transactions, synthetic identities, phishing and deepfake attempts, and other cyber-enabled fraud schemes that increasingly target smaller institutions and their customers,” wrote ICBA Vice President, Operational Risk and Cybersecurity Policy Anjelica Dortch. “On the operational side, AI can streamline document processing, improve reconciliation, reduce false positives in anti-money laundering (AML) alerts, and automate routine service requests so staff can focus on higher-value relationship work. And on the risk-management side, AI can augment existing models and early-warning systems for credit, liquidity, and operational risk.”
Appraisal Institute Vice Chair of the Appraisal Institute’s Government Relations Committee Deb Clark highlighted the need for a standardized framework to account for the growth potential of AI tools, as well as appropriate guardrails, during an Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) public hearing on Oct. 30.
“While these tools can improve efficiency and objectivity,” she said. “They must operate within a framework that preserves independence, transparency and accountability.”
Clark called on the federal prudential regulators to establish clear standards for model validation, data governance and human oversight when technology influences collateral-risk decisions.