Four federal agencies on Tuesday acknowledged the growth of artificial intelligence-powered automated systems, but said such systems do not mean the companies that use them can ignore or break the law.
The Civil Rights Division of the U.S. Department of Justice, the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), and the U.S. Equal Employment Opportunity Commission (EEOC) released a joint statement outlining their commitment to enforce their respective laws and regulations.
Watch The Interest
The four agencies jointly pledged to “uphold America’s commitment to the core principles of fairness, equality, and justice,” as emerging automated systems become increasingly common — impacting civil rights, fair competition, consumer protection, and equal opportunity.
The four agencies have previously raised concerns about the potentially harmful uses of automated systems and resolved to vigorously enforce their collective authorities and to monitor their development and use.
“Technology marketed as AI has spread to every corner of the economy, and regulators need to stay ahead of its growth to prevent discriminatory outcomes that threaten families’ financial stability,” said CFPB Director Rohit Chopra. “[Tuesday’s] joint statement makes it clear that the CFPB will work with its partner enforcement agencies to root out discrimination caused by any tool or system that enables unlawful decision making.”
“We have come together to make clear that the use of advanced technologies, including artificial intelligence, must be consistent with federal laws,” said Charlotte A. Burrows, chair of the EEOC. “America’s workplace civil rights laws reflect our most cherished values of justice, fairness and opportunity, and the EEOC has a solemn responsibility to vigorously enforce them in this new context. We will continue to raise awareness on this topic; to help educate employers, vendors, and workers; and where necessary, to use our enforcement authorities to ensure AI does not become a high-tech pathway to discrimination.”
FTC Chair Lina M. Khan echoed those statements. “We already see how AI tools can turbocharge fraud and automate discrimination, and we won’t hesitate to use the full scope of our legal authorities to protect Americans from these threats,” Khan said. “Technological advances can deliver critical innovation — but claims of innovation must not be cover for lawbreaking. There is no AI exemption to the laws on the books, and the FTC will vigorously enforce the law to combat unfair or deceptive practices or unfair methods of competition.”
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, agreed. “As social media platforms, banks, landlords, employers, and other businesses that choose to rely on artificial intelligence, algorithms, and other data tools to automate decision-making and to conduct business, we stand ready to hold accountable those entities that fail to address the discriminatory outcomes that too often result,” Clarke said. “This is an all hands on deck moment and the Justice Department will continue to work with our government partners to investigate, challenge, and combat discrimination based on automated systems.”
The joint statement follows a series of CFPB actions to ensure advanced technologies do not violate the rights of consumers. Specifically, the CFPB has taken steps to protect consumers from:
- Black box algorithms: In a May 2022 circular, the CFPB advised that when the technology used to make credit decisions is too complex, opaque, or new to explain adverse credit decisions, companies cannot claim that same complexity or opaqueness as a defense against violations of the Equal Credit Opportunity Act.
- Algorithmic marketing and advertising: In August 2022, the CFPB issued an interpretive rule stating when digital marketers are involved in the identification or selection of prospective customers or the selection or placement of content to affect consumer behavior, they are typically service providers under the Consumer Financial Protection Act. When their actions — such as using an algorithm to determine who to market products and services to — violate federal consumer financial protection law, they can be held accountable.
- Abusive use of AI technology: Earlier this month, the CFPB issued a policy statement to explain abusive conduct. The statement is about unlawful conduct in consumer financial markets generally, but the prohibition would cover abusive uses of AI technologies to, for instance, obscure important features of a product or service or leverage gaps in consumer understanding.
- Digital redlining: The CFPB has prioritized digital redlining, including bias in algorithms and technologies marketed as AI. As part of this effort, it is working with federal partners to protect homebuyers and homeowners from algorithmic bias within home valuations and appraisals through rulemaking.
- Repeat offenders’ use of AI technology: The CFPB proposed a registry to detect repeat offenders. The registry would require covered nonbanks to report certain agency and court orders connected to consumer financial products and services. The registry would allow the CFPB to track companies whose repeat offenses involved the use of automated systems.
- Whistleblowing: The CFPB has also launched a way for tech workers to blow the whistle. It encourages engineers, data scientists, and others who have detailed knowledge of the algorithms and technologies used by companies and who know of potential discrimination or other misconduct within the CFPB’s authority to report it. CFPB subject-matter experts review and assess credible tips, and the bureau’s process ensures that all credible tips receive appropriate analysis and investigation.
The CFPB said it will continue to monitor the development and use of automated systems, including AI-marketed technology, and work closely with the Civil Rights Division of the DOJ, FTC, and EEOC to enforce federal consumer financial protection laws and to protect the rights of consumers, regardless of whether legal violations occur through traditional means or advanced technologies.
The bureau said it will also release a white paper this spring discussing the current chatbot market and the technology’s limitations, its integration by financial institutions, and the ways the CFPB is already seeing chatbots interfere with consumers’ ability to interact with financial institutions.
