The Consumer Financial Protection Bureau issued guidance about certain legal requirements that lenders must adhere to when using artificial intelligence and other complex models.
Details: The guidance says:
Lenders must use specific and accurate reasons when taking adverse actions against consumers.
Creditors cannot simply use the CFPB’s sample adverse-action forms and checklists if they do not reflect the actual reason for the denial of credit or a change of credit conditions.
This requirement is especially important with the growth of advanced algorithms and personal consumer data in credit underwriting.