EC and CFPB Collaborate on AI and BNPL Consumer Risks

US and European officials have initiated discussions on consumer financial protection, focusing on the growing presence of Big Tech in payments, the use of AI in lending, and the rise of buy now, pay later (BNPL) schemes, according to Finextra.

Senior representatives from the European Commission and the Consumer Financial Protection Bureau (CFPB) have engaged in talks regarding these «priority areas,» aiming to exchange expertise and best practices while aligning their approaches.

The popularity of BNPL services has surged on both sides of the Atlantic, prompting concerns about increased over-indebtedness, a trend expected to rise significantly over the next decade, according to the EC.

Concurrently, regulators in the US and Europe are addressing the expanding role of Big Tech in finance, particularly in payments. Both the EC and CFPB have raised antitrust concerns regarding Apple’s digital wallet.

Regarding AI, officials have discussed the differences and similarities in legal and regulatory frameworks concerning consumer finance, sharing information on the various AI and automated decision-making use-cases deployed by firms in each jurisdiction.

In a joint statement, CFPB Director Rohit Chopra and EC Commissioner Didier Reynders emphasized the importance of US-EU coordination on firms, products, consumer trends, and risks spanning the Atlantic. They highlighted the need to ensure consumer financial data and privacy are respected, not surveilled or misused, and to maintain meaningful choices in competitive consumer finance markets. They also emphasized the importance of avoiding fraud and manipulation and providing consumers with the necessary tools for recourse in case of problems.