InfoBytes Blog
CFPB, EU start talks on AI, digital finance
On July 17, CFPB Director Rohit Chopra and Commissioner for Justice and Consumer Protection of the European Commission Didier Reynders issued a joint statement announcing the start of new dialogue on consumer financial protection with a primary focus on digital developments in the financial sector and ways to improve policy and regulatory cooperation.
Chopra and Reynders stressed that there are significant implications for both businesses and households from the digitalization of the financial services sector, including impacts on pricing, customer service, competition, and privacy. They noted that financial institutions are increasingly deploying automated decision-making processes, leveraging artificial intelligence technologies, and developing and introducing new financial products and services, such as Buy Now, Pay Later. Chopra and Reynders also commented that digital payments are becoming “increasingly offered and controlled by Big Tech.” They warned these developments, if not properly regulated, “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.” Chopra and Reynders also cautioned that policymakers must do more to keep pace with evolving markets and ensure consumer protection.
The dialogue will address topics relating to:
- The deployment of automated decision-making and data processing and implications for consumers;
- Risks associated with emerging credit options, including the potential risks of over-consumption and over-indebtedness for consumers who use these products;
- Measures for exploring ways to assist over-indebted consumers in managing and repaying their debt sustainably;
- Digital transformation and access to fair financial services, including to unbanked and underbanked consumers, as well as those who prioritize protecting their personal data; and
- Competition, privacy, security, and financial stability implications associated with big tech companies that offer financial services.
Chopra and Reynders will meet informally at least once per year to share insights and experiences on consumer financial issues. According to the statement, the dialogue will also involve staff discussions, bilateral meetings with subject matter experts, and roundtables with stakeholders. The cooperation and exchanges within the informal dialogue are expected “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 regulations,” the joint statement said.