Beyond Free Markets and Consumer Autonomy: Rethinking Consumer Financial Protection in the Age of Artificial Intelligence

Abstract

The rampant growth of artificial intelligence (AI) has reshaped the landscape of credit underwriting and distribution in consumer financial markets. Despite expanding consumers’ access to credit, the unbridled use of AI by creditors has widened credit and wealth inequality along racial, gender, and class dimensions. However, existing regulatory paradigms of consumer financial protection fail to meaningfully protect consumers against potential AI discrimination and exploitation. At its core, the failure of the existing legal regime lies in its fetishization of free market and consumer autonomy—the two ideological pillars of neoliberalism. Judges and lawmakers who subscribe to neoliberal ideals have consistently attributed credit market defects to individual choices, rather than systemic and inherited social inequalities. Today, this neoliberal ethos continues to inform mainstream legal responses to the threats posed by AI.

This article proposes an alternative. It argues that thinking of AI governance in purely individualist, dignitarian terms obscures the real source of algorithmic harm. Contrary to the neoliberal assumptions, AI-inflicted harms in credit markets—i.e., discrimination and exploitation—are not the results of irresponsible creditor conduct or opaque markets. Rather, they are caused by unjust relations of data production, circulation, and retainment that reflect and reproduce systemic social inequalities. Understanding algorithmic harm as both individually and socially constituted can help us move away from the outdated neoliberal paradigms that idolize individual responsibility. It also opens up new avenues for legal reform. To reshape unjust data relations, this article proposes a propertarian approach to AI governance that involves: (1) reimagining the nature of data ownership, (2) creating a collective property right in data, and (3) building a collective data governance infrastructure anchored in the open digital commons.

Keywords: artificial intelligence, consumer finance, data governance, neoliberalism, access to credit, consumer credit underwriting, algorithmic harm