New York Launches AI Safety Center Ahead of RAISE Act Deadline

New York is ramping up oversight of artificial intelligence, which will directly impact how you use automated tools for credit decisions and customer interactions. Governor Kathy Hochul has launched a new state-run AI safety center to prepare for the upcoming RAISE Act, effective this January. For retailers and service providers, this means the algorithms you use to approve financing or set interest rates are about to face much stricter scrutiny. The new initiative aims to identify bias and safety risks in AI systems. If your business relies on third-party software for instant credit approvals or lease-to-own eligibility, those systems must now meet higher transparency standards. The state is essentially building a watchdog group to ensure that automated tools don't unfairly discriminate against certain customer segments. While the center is focused on research, its findings will likely dictate how the RAISE Act is enforced. Operators should prepare for a landscape where 'the algorithm made the decision' is no longer an acceptable legal defense. You may need to ask your financing partners for documentation on their AI models to ensure they comply with New York's evolving standards. The goal of the state is to prevent automated bias, but for your business, the immediate task is ensuring your sales flow isn't interrupted by sudden regulatory shifts.

Source: PYMNTS

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