News & Analysis as of

Artificial Intelligence Consumer Financial Products Equal Credit Opportunity Act

Troutman Pepper Locke

CFPB Highlights Fair Lending Risks in Advanced Credit Scoring Models

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Last week, the Consumer Financial Protection Bureau (CFPB or Bureau) released its latest Supervisory Highlights report, focusing on the use of advanced technologies in credit scoring models. ...more

Troutman Pepper Locke

Troutman Pepper Weekly Consumer Financial Services Newsletter - November 2024 # 2

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To keep you informed of recent activities, below are several of the most significant federal and state events that have influenced the Consumer Financial Services industry over the past week...more

Goodwin

Double Clicking on Innovation in Consumer Finance: Responsible Use of AI

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Artificial intelligence (AI) is becoming ubiquitous across sectors, and the financial services industry is no exception. With the rise of AI, there is also an increase in scrutiny by regulators over its use....more

Goodwin

Interpretable Algorithms as a Potential Solution to CFPB’s Guidance on AI-driven Credit Denials

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​​​​​​​In September 2023, the Consumer Financial Protection Bureau (CFPB) issued guidance on the use of artificial intelligence in issuing credit denials, a prevalent practice among lenders. The CFPB explained that when...more

Skadden, Arps, Slate, Meagher & Flom LLP

CFPB Applies Adverse Action Notification Requirement to Artificial Intelligence Models

As technology continues to advance, regulators are increasingly addressing the fair lending implications of artificial intelligence (AI), even though comprehensive rules governing AI have yet to be promulgated. Notably, the...more

Hudson Cook, LLP

CFPB Bites of the Month - 2023 Annual Review - Nondiscrimination and Military Protection Law

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In this article, we share a timeline of our monthly "bites" for 2023 applicable to consumers protected by nondiscrimination and military protection laws....more

Saul Ewing LLP

CFPB Issues Guidance on Use of AI in Credit Decisioning

Saul Ewing LLP on

In September, the Consumer Financial Protection Bureau issued guidance on compliance with the Equal Credit Opportunity Act’s adverse action notice requirements for lenders utilizing artificial intelligence in their credit...more

Jones Day

CFPB Guidance Puts Creditors on Notice About AI-Involved Adverse Actions

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Recent Consumer Financial Protection Bureau ("CFPB") guidance reiterates that creditors must provide consumers with accurate and individualized explanations for adverse actions—a task made more difficult by the complexity of...more

Husch Blackwell LLP

CFPB Issues New Guidance for AI-Driven Credit Decisions

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On September 19, 2023, the Consumer Financial Protection Bureau (CFPB) issued new guidance outlining lenders’ obligations under the Equal Credit Opportunity Act (ECOA) and Regulation B when using artificial intelligence (AI)...more

Wiley Rein LLP

Wiley Consumer Protection Download (October 2, 2023)

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Welcome to Wiley’s update on recent developments and what’s next in consumer protection at the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC). In this newsletter, we analyze recent regulatory...more

Kilpatrick

Creditors Using AI Underwriting Must Provide Specific Reasons for Adverse Action

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Artificial intelligence (“AI”) and complex credit models may help lending institutions make decisions on credit applications more efficiently, but they’re also inviting increased scrutiny from regulators. On September 20,...more

Venable LLP

CFPB Weighs in on Credit Denials by Lenders When Using AI and Complex Credit Models

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The CFPB has issued a Circular addressing adverse action notification requirements and the proper use of the CFPB's sample forms provided in Regulation B when using artificial intelligence (AI) and complex credit models, and...more

Ballard Spahr LLP

CFPB Revisits Adverse Action Notice Requirements When Using Artificial Intelligence or Complex Credit Models

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In May 2022, the CFPB issued Circular 2022-3 addressing Equal Credit Opportunity Act (ECOA) adverse action notice requirements in connection with credit decisions based on algorithms. The CFPB is now revisiting the issue in...more

Cadwalader, Wickersham & Taft LLP

CFPB Issues Guidance on Credit Denials by Lenders Using Artificial Intelligence

On September 20th, the Consumer Financial Protection Bureau (“CFPB”) published guidance – Consumer Financial Protection Circular, 2023-03 – regarding the list of reasons that must be provided when an applicant is denied...more

Troutman Pepper Locke

CFPB Calls for Increased Specificity and Accuracy on Reasons for Credit Denials When Lenders Employ Artificial Intelligence

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When using artificial intelligence (AI) or complex credit models, can lenders rely on the checklist of reasons provided in Regulation B sample forms for adverse action notices? According to today’s guidance issued by the...more

Cadwalader, Wickersham & Taft LLP

Vice Chair Barr Speaks on Fair Lending in Age of AI

Michael Barr, the Federal Reserve Board’s (“FRB”) Vice Chair for Supervision, delivered remarks, titled “Furthering the Vision of the Fair Housing Act,“ to the National Fair Housing Alliance 2023 National Conference earlier...more

Troutman Pepper Locke

CFPB’s 2022 Fair Lending Report Focuses on Bias in Mortgage Lending, Redlining, Home Appraisals, Small Business Lending, and Shows...

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As shown by a new report, the Consumer Financial Protection Bureau (CFPB or Bureau) is focusing its fair lending work on mortgage origination and pricing, small business lending, redlining, and the use of artificial...more

Ballard Spahr LLP

FTC issues annual ECOA report to CFPB (UPDATED)

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The FTC recently sent its annual letter to the CFPB reporting on the FTC’s activities related to the Equal Credit Opportunity Act (ECOA) and Regulation B.  The new letter reports on the FTC’s activities in 2022.  The Bureau...more

Orrick, Herrington & Sutcliffe LLP

FTC provides 2022 ECOA summary to CFPB

On February 9, the FTC announced it recently provided the CFPB with its annual summary of activities related to ECOA enforcement, focusing specifically on the Commission’s activities with respect to Regulation B. ...more

BCLP

Does Your Current Use of AI in Financial Services Align with the U.S. “AI Bill of Rights”?

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As OpenAI’s release of ChatGPT in late 2022 and expected release of GPT-4 in 2023 continues to garner widespread attention, there is renewed focus on both opportunities and risks presented by the use of artificial...more

McGlinchey Stafford

Powersports and the CFPB: Fair lending, fees, repossessions, and voluntary products

McGlinchey Stafford on

Compliance lawyers last summer were predicting that the Consumer Financial Protection Bureau (CFPB) would announce a robust regulatory agenda under the Biden administration, but we had not yet seen many details that allowed...more

Cadwalader, Wickersham & Taft LLP

No, Fancy Technology Does Not Excuse Compliance Obligations

The Consumer Financial Protection Bureau (“CFPB”) released a regulatory Circular providing guidance regarding the use of “complex algorithms” to assess whether a consumer should be extended credit. Often referred to as “black...more

Goodwin

CFPB Issues No Action Letter Related to Use of Artificial Intelligence Underwriting Model

Goodwin on

On November 30, 2020, the Consumer Financial Protection Bureau (CFPB) granted a no-action letter​ to an online loan marketplace company for its artificial intelligence (AI) loan origination and underwriting platform.​ ...more

Ballard Spahr LLP

CFPB 2020 Fair Lending Report Highlights Adverse Action Notices When Using Artificial Intelligence

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The CFPB’s annual fair lending report covering its 2019 activities is scheduled to be published in tomorrow’s Federal Register.  While most of the report recycles information about which we have previously blogged, it does...more

Ballard Spahr LLP

House to hold hearing on artificial intelligence

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On February 12, 2020, the House Financial Services Task Force on Artificial Intelligence will hold a hearing titled, “Equitable Algorithms: Examining Ways to Reduce AI Bias in Financial Services.”...more

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