To that end, Didier Reynders, commissioner for justice and consumer protection of the European Commission and his U.S. counterpart Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB), issued a joint statement indicating a new “informal dialogue” has been opened between the two entities. The announcement says the agencies will focus on a wide range of consumer protection issues including AI-driven automated decision-making technologies, relatively new financial services and products like “Buy Now, Pay Later” and the role of large technology firms in the financial services space.
The stakes are high, and consumer protection issues will, naturally, be weighed carefully against the potential these emerging technologies have to dramatically reduce costs for financial service providers. One figure from a Business Insider study reported by Finextra shows that banks are projected to save $447 billion this year thanks to newly implemented AI solutions.
“Digital payments are faster and more frictionless and are increasingly offered and controlled by Big Tech companies. These developments, if left unchecked, could increase consumers’ exposure to fraud and manipulation, limit their product options over time, threaten their control over their own data, and force them to accept more expensive personalized pricing for the same products and services compared to other consumers.”
As such, Reynders and Chopra resolved to keep their “shared priorities and public mandates” in mind as they move forward together. Included in the new dialogue will be an exchange of technical expertise and coordination on pressing policy issues, adds the announcement.
From Twitter
"FTC probe of OpenAI: Consumer protection is the opening salvo of US AI regulation. The move comes as EU regulators have begun to take action, and Congress is working on legislation to regulate the AI industry Prof @asusarla via https://theconversation.com/ftc-probe-of-openai-consumer-protection-is-the-opening-salvo-of-us-ai-regulation-209821… @ConversationUS"
Among some of the specific topics to be addressed include:
- Consumer risks born from the proliferation of automated decision-making
- Privacy rights, data misuse and transparency considerations
- Emerging credit options like “Buy Now, Pay Later” and its impact on consumers
- Strategies to combat “over-indebtedness”
- Strategies to support sustainable debt repayment for over-indebted individuals
- Digital solutions that facilitate access and fair choice
- Competition, security, stability and privacy concerns related to big tech companies dealing in financial services
The new arrangement calls for the two agency heads to meet “at least once a year,” and it will also include bilateral discussions between staff, subject matter experts and principal stakeholders. “The European Commission and the Director of the CFPB expect the cooperation and exchanges within this Informal Dialogue to occur in parallel with other forms of cooperation and exchanges between the European Union and the United States on various digital and financial services policies and regulation,” notes the announcement.
Per the new directive, some subjects will be discussed more broadly while others may be addressed non-publicly. “Policymakers on both sides of the Atlantic are responding to these issues, but we must do more to compete with the pace of evolving markets and consumer needs,” it adds.
