Could AI and ChatGPT Hurt Americans Financially? US Government Details Safeguards in Place

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Regulators from four federal agencies jointly pledged to enforce their respective laws to the “core principles of fairness, equality and justice” as AI is becoming increasingly common in daily lives — something that could impact “civil rights, fair competition, consumer protection and equal opportunity.”

The extremely rapid evolution of AI — notably seen with OPenAI’s ChatGPT — is prompting regulators to come up with a framework to protect consumers, as the new technology could result in discrimination, according to the joint announcement. 

“Today, several federal agencies [the Consumer Financial Protection Bureau, the Department of Justice, the Equal Employment Opportunity Commission and the Federal Trade Commission] are coming together to make one clear point: there is no exemption in our nation’s civil rights laws for new technologies that engage in unlawful discrimination,” said CFPB Director Rohit Chopra in prepared remarks. 

The discrimination, they argue, can for example be found in housing, employment or lending. 

For example, the CFPB said it would confront what it calls “digital redlining,” which is bias present in lending or home valuation algorithms. In turn, the agency said it would be proposing rules to make sure AI and automated valuation models have basic safeguards when it comes to discrimination. 

“AI is being used right now to decide who to hire, who to fire, who gets a loan, who stays in the hospital and who gets sent home,” FTC Commissioner Alvaro Bedoya tweeted earlier this month. “I am much more worried about those current, real-life uses of AI than potential downstream existential threats.”

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Some experts agree, saying that while AI will provide opportunities, it will also present challenges for consumers, financial institutions and regulators.

One of the opportunities, according to Phil Siegel, co-founder of CAPTRS, a non-profit using AI-for-good, focused on societal preparedness, is that financial products will be more tailored to each consumer’s specific needs and priorities. 

“An example might be hybrid loan and insurance products that adapt to the consumer’s time of life,” said Siegel. “Another benefit will be better self-serve advice applications–kind of an ‘angel on your shoulder’ as each family considers what is best for their personal finance needs.”

He noted, however, that on the negative front, the scams, phishing schemes and fraudulent offers will become more sophisticated over time. 

“Today consumers receive many emails, texts and calls trying to defraud them — these will become even more frequent, more persuasive, and better planned so consumers will need to be ever more vigilant,” he added. 

As for regulators, Siegel said that they will need to make sure consumer protections are in place to not allow AI to abuse consumers.

“Putting in place expanded guidelines to protect our society’s core financial infrastructure will be a massive undertaking for regulators who may or may not currently be up to the challenge,” he said. “AI will enable more sophisticated attacks on core IT infrastructure at our financial institutions and exchanges as bad actors or our political enemies use the technology to be more creative in their approaches.”

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The regulators’ effort comes on the heels of the open letter in which Elon Musk, Steve Wozniak and more than 27,000 signatories called for a six-month pause on the training of AI systems “more powerful than GPT-4.” 

“This pause should be public and verifiable, and include all key actors. If such a pause cannot be enacted quickly, governments should step in and institute a moratorium,” signatories said in the letter.

Musk and Wozniak argued in the letter that AI systems with human-competitive intelligence can pose profound risks to society and humanity and “could represent a profound change in the history of life on Earth, and should be planned for and managed with commensurate care and resources.”

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