The US Treasury Department is taking a closer look at the use of artificial intelligence in auto finance, which could lead to more AI adoption in the industry. In June, the Treasury Department sent out a request to the financial services sector for information on the use and risk of AI. This move is significant because, so far, there has been little direct government regulation of AI in auto finance.
Dealerships and lenders are already preparing for future AI compliance rules, indicating that the industry expects regulation to increase. As AI becomes more pervasive in the industry, companies are taking steps to ensure they are ready for any potential regulations. This includes implementing AI governance frameworks and ensuring transparency in AI decision-making processes.
Regulators are paying attention to AI in auto finance, and experts say dealerships and lenders need to pay attention too. The use of AI in auto finance raises concerns around fairness, transparency, and accountability. Regulators want to ensure that AI systems are not perpetuating biases or discriminating against certain groups of consumers.
As the Treasury Department continues to explore the use of AI in auto finance, it is likely that we will see more guidance and regulations around its use. Dealerships and lenders should be prepared to adapt to these changes and ensure that their AI systems are transparent, fair, and compliant with regulatory requirements.
