Federal Reserve Gov. Lisa Cook called for weighing the costs and benefits of artificial intelligence, and flagged bias and fraud as areas of concern.

Other financial regulators have been examining AI in underwriting because potential biases or otherwise faulty criteria could lead to bad outcomes, while agencies including the Federal Trade Commission are looking into non-financial companies.

Bank regulators Friday said the existing laws governing safety and soundness and fair lending are adequate to address risks posed by artificial intelligence, noting that while AI may be used to inform lending decisions, banks are ultimately responsible for compliance.

During a second day of comparatively mild questioning from lawmakers in semiannual oversight hearings, Consumer Financial Protection Bureau Director Rohit Chopra said artificial intelligence could exacerbate existing weaknesses in the financial system without tighter protections.

While Pagaya searches for a permanent successor, the company has named deputy CFO Evangelos Perros as interim CFO. Perros himself was named as deputy CFO in September 2023.

The company missed revenue projections, and it's trying to tap other funding strategies amid a "difficult lending environment."

The FBI, NSA and CISA highlighted the emerging dangers of AI-powered deepfakes in phishing campaigns and cataloged protections companies can deploy.

In a data breach at OpenAI, some ChatGPT users were able to see other users' financial data. In other cases, users have invoked their dead grandmothers to access information that should have been sealed off.

The unsecured loans are generated on marketplace lending platforms using proprietary technology that use artificial intelligence and machine learning software.

The technology that powers ChatGPT can sift through and even synthesize massive amounts of data, though it must overcome doubts over reliability, transparency and regulatory risk before it can be harnessed to conduct useful research.