Could AI and ChatGPT Hurt Americans Financially? US Government Details Safeguards in Place
The rapid evolution of AI, especially with the emergence of OpenAI's ChatGPT, has raised concerns among regulators regarding consumer protection, civil rights, fair competition, and equal opportunity. Federal agencies, including the Consumer Financial Protection Bureau, Department of Justice, Equal Employment Opportunity Commission, and Federal Trade Commission, have pledged to enforce their respective laws to the core principles of fairness, equality, and justice. The US government has expressed its intention to propose measures to ensure that AI and automated valuation models have basic safeguards to prevent discrimination.
Regulators are particularly concerned about the potential for discrimination in housing, employment, and lending. The CFPB has reportedly detected "digital redlining," which is bias present in lending or home valuation algorithms. They are working on implementing rules to address this issue. Meanwhile, AI is being used to decide who gets hired, fired, a loan, a hospital bed, or to be sent home. FTC Commissioner Alvaro Bedoya expressed concerns about the current, real-life uses of AI that pose the most immediate threat, rather than potential existential threats.
While AI provides opportunities, it also presents challenges for consumers, financial institutions and regulators, according to experts. Phil Siegel, co-founder of CAPTRS, a non-profit using AI-for-good, explained that one of the benefits of AI is that financial products will be more tailored to each customer's specific needs and priorities. For example, hybrid loan and insurance products that adapt to the consumer's time of life would become possible. However, on the negative front, scams, phishing schemes, and fraudulent offers would become more sophisticated over time, requiring consumers to be more vigilant.
Siegel also highlighted the need for regulators to ensure that consumer protections are in place to prevent AI from abusing consumers. AI could enable more sophisticated attacks on core IT infrastructure at financial institutions and exchanges as bad actors or political enemies use the technology to be more creative in their approaches. Therefore, expanded guidelines are necessary to protect society's core financial infrastructure, but it will be a massive undertaking for regulators who may or may not currently be up to the challenge.
The regulatory efforts come after 27,000 signatories, including Elon Musk and Steve Wozniak called for a six-month pause on the training of AI systems "more powerful than GPT-4." They argued that AI with human-competitive intelligence could pose profound risks to society and humanity, and that it could represent a profound change in the history of life on Earth. Thus, they called for a pause to be enacted quickly, and if that's not possible, governments should step in and institute a moratorium.
In conclusion, the US government is taking significant steps to protect consumers from the negative effects of AI and has pledged to enforce laws to protect civil rights, fair competition, consumer protection, and equal opportunity. Although AI presents many opportunities, it also poses significant challenges that require regulators to be proactive to protect society's core financial infrastructure.
