CFPB Director Chopra Addresses AI Concerns

According to media reports, CFPB Director Rohit Chopra expressed his concerns over the rise of generative artificial intelligence (AI) technology in his remarks at an Axios event in Washington, D.C. last week.  Director Chopra indicated that AI could concentrate “enormous” power within the grasp of a few companies and their top executives.  He stated that “it’s the winner-take-all dimension of this that makes it much more pressing.  There could be a handful of firms, and just to be honest, a handful of individuals who ultimately have enormous control over decisions made throughout the world.”

Chopra also expressed unease with AI’s ability to “simulate human interaction,” saying it can be exploited to “interfere with human life and perpetrate fraud, crime, abuse.”  He specifically highlighted the CFPB’s investigation into the consumer fraud implications of certain generative AI, including the use of AI-assisted techniques such as voice cloning to bypass banks’ biometric authentication protocols, which he noted is “going to be a problem.”  He noted that the CFPB has also done a “pretty in-depth analysis” of banks’ use of customer service chatbots, with the goal to ensure that banks take responsibility for any erroneous information provided by their chatbots to consumers.

At the same time, Chopra conceded that AI could have beneficial applications for consumers, such as assisting in the finding and disputing of billing errors.  However, he stressed the importance of keeping in mind “who really is in control of it, who gets the gains from it.”  He stated that “what we’ve seen with lots of aggregations of data, [is] that much of the gains are not broadly distributed, and they go to a handful of people.”

Chopra seemed skeptical when asked about the need for new laws or even a new government agency to regulate AI, stating that, in many cases, regulators already have the authority to address the privacy, competition and other concerns presented by AI.  “The public has long-standing laws on the books that actually need to be enforced,” Chopra said.  “None of those laws have a fancy technology exception to them, and I think that’s a key focus for the regulators right now.”

As for a new, AI-focused government agency, Chopra said it would be challenging to create such a regulator because AI’s potential applications cut across so many different areas of law and economic activity.  “If you’re going to do that, you have to keep the existing [agencies], too,” he said.  “The challenge with regulating data is it’s regulating everything, so you can’t create a situation where there’s not accountability to do it.”  Moreover, to create a new AI agency, he argued, lawmakers would similarly need to think through what gap they would want it to fill, stating, “I would ask, what do you want to achieve through that?  Are you looking for technical expertise?  Are you looking for enhanced merger review, acquisition review?  Is it more of a national security approach?  I think once you answer those questions, it can all come into line.”