On July 7, the Consumer Financial Protection Bureau issued a blog post discussing the intersection of artificial intelligence/machine learning and adverse action notice compliance requirements. The blog described how existing laws and rules allow flexibility for lenders to offer compliant adverse action notices, even in instances when the reason for the adverse action is associated with an artificial intelligence/machine learning process that is inherently challenging to explain.
The blog post reaffirms that lenders should avail themselves of the tools and support offered by the Bureau, including the Trial Disclosure program, the No-Action Letter policy, and the Compliance Assistance Sandbox. The Bureau is eager to work with lenders to bring clarity to questions relating to use of artificial intelligence/machine learning in underwriting, viewing this area of innovation and potentially bringing important benefits to consumers.
July 13th, 2020 by Dan Bucherer