Exclusive-U.S. bank regulators ramp up scrutiny of AI use at financial companies

U.S. banking regulators are tightening scrutiny of how lenders deploy artificial intelligence across higher-risk activities. The OCC and the Federal Reserve have begun asking banks to map AI usage in lending, know-your-customer checks and sanctions screening. Regulators want detailed information on vendor governance, data protection, kill switches and guardrails, along with human oversight and contingency plans. Discussions are ongoing through written and verbal channels, with no prescriptive rules yet but an intent to understand deployments better. The push comes as banks rush to implement AI, highlighting the need for robust third-party risk management and cybersecurity safeguards.