Why the CFPB cares about tech and AI

As the Consumer Financial Protection Bureau celebrates its 12th anniversary Friday, it has its sights firmly set on how tech and AI are changing the world of personal finance.

• That's a vastly different worldview from when the CFPB was formed in response to the 2008 financial crisis.

Ashley spoke with director Rohit Chopra, formerly a Democratic FTC commissioner, about why consumers should be wary of Big Tech and payment apps, the threats of AI in banking and finance and why federal agencies need technologists.

The following interview has been edited and condensed for clarity.

The CFPB is a fairly young agency and it's hard to imagine a new agency being formed now, given the current political climate, though ideas for digital platform and AI agencies have been thrown around. Do we need such agencies?

One of the challenges is the sector regulators are still going to have to deal with the reality of the evolution of technology and more intensive uses of data. The question is often: What are the new tools that any new agency might have?

• In the case of the CFPB, it came alongside the destruction of another agency. So some of it is, what are you creating and what are you moving around?
• You're seeing across the government today hard looks at existing authorities to tackle the risks associated with AI and data surveillance. In some ways, we have to look at the tools we have as well.

You just met with Didier Reynders, the EU Commissioner for Justice, about coordinating on financial consumer protection issues. Why is it helpful to coordinate with the EU?

We used to think about regulating consumer finance and data as a domestic enterprise; obviously, that has dramatically shifted. When it comes to Big Tech companies entering payments, or "Buy Now, Pay Later," we not only have some of the same challenges as other jurisdictions but we're regulating some of the same players, which wasn't the case in banking before.

• We're not only comparing notes but teaming up on ways to crack down on some of the problematic practices that may violate the laws in both jurisdictions.

The CFPB has said it wants to staff up with technologists to enhance its work. Why is that important? Have you been able to do that?

There's no question we've got people with expertise in data science, AI and user experience. It's not without its challenges, bringing people in with technical talent to a regulatory agency. We have to help those people also be successful.

• A key place they're being deployed is digital discrimination, looking at some of the use of artificial intelligence in lending decisions. They really played a role in our analysis of chatbots and generative AI for customer support.

• I would expect we're going to continue our push to bring people with those skills in-house.

What's the most important thing for the average consumer to know about using Big Tech platforms to make payments?

First is that storing money in those accounts is not always as safe as holding it in an insured bank or credit union.

• The second is that, compared to banks, the way in which some tech companies are harvesting data, it may be surprising to people that not only are they sharing the dollar amount of their purchase, but it could be linked with their geolocation, what they might have searched for.
• It could lead to a world where there's personalized pricing, algorithmic pricing that might measure your emotional state to determine the price or availability of a good.

The CFPB, the FTC and the Justice Department are proposing drastic changes to how the government has treated big business, and there's been a lot of pushback. What's your overall view of this?

I think [large companies] were fairly accustomed to calling the shots with the regulators, and there was a degree of coziness that I think is rightfully fading away. And rather than regulators picking winners and losers, you're seeing the regulators be more umpires on broader issues of fair dealing and competition.

• Will there be pushback from lobbyists? Of course, but that's part of how it works. And history tells us it will always be that way.