California Governor Mobilizes Expert Panel to Strengthen AI Safety Laws

California is taking aggressive steps to lead the nation in AI regulation, which will directly impact how you use technology to approve customers and manage risk. Governor Newsom’s new executive order creates a panel of experts to tighten safety and security laws around artificial intelligence. For retailers and service providers, this signals a shift toward stricter oversight of the algorithms used in credit scoring, fraud detection, and automated customer service. If your financing platform uses AI to determine creditworthiness or offer Buy Now, Pay Later (BNPL) terms, these new rules could change how you handle data. California often sets the standard for the rest of the country. You should expect increased transparency requirements regarding why a customer was denied or how their personal data is being processed by automated systems. The goal is to prevent bias and ensure security, but it also means operators must be more diligent about the software vendors they choose. Now is the time to ask your financing partners about their AI compliance and how they plan to adapt to California's evolving legal landscape.

Source: PYMNTS

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