California’s Business and Consumer Services Agency (BCSA) is launching an investigation into how businesses utilize AI and chatbots. Secretary Rohit Chopra stated that the agency aims to determine if these technologies violate existing state prohibitions against the unlicensed practice of medicine or other regulated professions.
The initiative shifts regulatory focus from the AI systems themselves to the specific tasks they perform. The BCSA, which oversees sectors including financial services, real estate, and healthcare, will examine whether software is executing activities legally reserved for licensed professionals. This approach utilizes existing licensing laws rather than waiting for new AI-specific legislation.
For financial firms and FinTech companies, this means the regulatory perimeter now includes professional licensing compliance. Companies may need to audit whether their AI systems perform functions requiring human judgment or professional credentials. The BCSA has the authority to enforce penalties, including the potential loss of a business license to operate in California.
This strategy reflects a broader trend where regulators apply established statutes to emerging technologies. By focusing on professional standards, California may establish a model for other states to regulate autonomous AI systems through existing supervision frameworks instead of comprehensive new laws.
