• Key insight: Treasury Secretary Scott Bessent said that the Trump administration has been at the "forefront" of dealing with AI questions. 
• Forward look: Questioning on AI was particularly fierce from Democrats, who are expected to have a larger hand in policymaking after the 2026 midterms. 
• What's at stake: Bessent pointed to his summoning of large bank CEOs to Treasury to discuss advanced AI models and the risks they pose to banks.

WASHINGTON — Treasury Secretary Scott Bessent wound up mainly fielding questions from Democrats and Republicans on artificial intelligence at his annual House testimony about the international financial system. Bessent, in the House Financial Services Committee, gave his opening statement over the yells of a number of protesters who were escorted out of the hearing. Most of the discussion, however, revolved around anxieties about AI, its impact on the financial system and American voters. 

AI and data centers have proven so far to be a motivating factor for voters on both sides of the aisle, and have been the topic of town halls, advertisements and grassroots activism throughout the country. Both Republicans and Democratic representatives were trying to make points on the issue as campaigns for the 2026 midterm elections pick up. 

"AI companies, too, are doing very well on their watch while we dismiss the threat to workers and jobs, our financial system and even our very existence," said Rep. Maxine Waters, D-Calif., said at the hearing. Waters is likely to be the chair again of the committee if Democrats win the House in November, as they're projected to. 

Bessent, meanwhile, has a tightrope to walk on the subject. Campaigning Republicans need to show they're responsive to constituent concerns, but Bessent has talked repeatedly that the U.S. needs to outcompete China in the technology.

At the hearing, he defended private-sector actors, and said that the Trump administration is dealing with the issue. 

"They could stop any time they want to," Bessent said of AI companies. He said that the Trump administration has been at the "forefront" of examining AI models. 

In response to Republican questions about the financial system's AI readiness, Bessent pointed to the meeting Treasury hosted with the heads of large banks on the topic. 

"As soon as the news of Mythos came out, I gathered the largest banks who happened to be in D.C. at Treasury and began discussing this," Bessent said. "The largest banks have very good cybersecurity resilience, and they have been very helpful in terms of creating more resilience." 

That means, Bessent said, "populating out" that technology to regional to small community banks. 

Bessent also hit at points that the Trump administration has repeatedly talked about in these hearings: tailoring requirements for small banks. Specifically, Bessent this time talked about it in terms of banks' anti-money laundering requirements. He said the Treasury Department is looking at "raising thresholds" for small banks for things like filing suspicious activity reports and other requirements. 

"We are in the midst of this, and always will be looking after our smaller financial institutions, small banks and community banks," he said.