Warren Urges Fed, FDIC, and OCC to Rescind Policies Leaving America's Banks Vulnerable to Cyberattacks, AI Threats

Warren Urges Fed, FDIC, and OCC to Rescind Policies Leaving America's Banks Vulnerable to Cyberattacks, AI Threats

"Allowing cybersecurity vulnerabilities to fester, instead of remediating them early, could lead to more frequent and severe cyberattacks, threaten the sensitive financial data of businesses and households, and undermine the stability of the financial system."

Letter to Fed (PDF) | Letter to OCC, FDIC (PDF)

Washington, D.C. - U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs, wrote to Fed Vice Chair for Supervision Michelle Bowman, Federal Deposit Insurance Corporation Chairman Travis Hill, and Comptroller of the Currency Jonathan Gould, calling on the regulators to rescind an updated supervisory policy and final rule governing bank examiners' ability to issue supervisory warnings and execute enforcement actions to address risky conduct. These changes leave America's banking system more vulnerable to malicious cyberattacks and are especially harmful at a time when financial institutions are increasingly subject to AI-enabled attacks.

The Fed's new policy and the FDIC and OCC's final rule narrow the definition of an "unsafe or unsound" practice and may prevent examiners from taking enforcement or supervisory actions related to unsafe cybersecurity practices.

Both the Fed's supervisory policy and the OCC's and FDIC's rule are inadequate to protect America's financial system from a rapidly-evolving landscape of cyber threats.

"This policy is especially harmful at a time when AI-enabled cyberattacks are intensifying and placing critical financial infrastructure at risk. As advancements in frontier AI increasingly enable bad actors to conduct cyberattacks, the Fed should be strengthening bank examiners' supervisory tools and their ability to enforce strong cybersecurity standards, not gutting them," wrote Ranking Member Warren. "I write to request that you immediately rescind this policy."

"The proliferation of AI tools that expedite phishing attempts or aid in exploiting vulnerabilities is increasingly subjecting financial institutions and their third party vendors to cyberattacks," the Ranking Member continued. "The potential consequences of sophisticated attacks on the financial system include operational disruption and data compromise."

"Given the elevated threats AI-enabled cyberattacks raise for the financial system, I urge you to immediately rescind this supervisory policy and instead strengthen bank examiners' ability to enforce strong cybersecurity standards," Ranking Member Warren concluded. "If you refuse to do so, you will share responsibility for the potential harm wrought by future cyberattacks on the banking system."

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