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In August 2024, the CFPB filed a comment to the Treasury Department in connection with the Department’s RFI on Uses, Opportunities, and Risks of Artificial Intelligence in the Financial Services Sector. All comments are available online.
Of note, the Bureau wrote that
The CFPB has also seen that financial institutions are increasingly using new technologies to engage in “fraud screening,” often through third-party vendors that assign consumers individualized risk “scores.” These companies often tout their use of machine-learning and other forms of “AI.” It is critical that companies offering these services recognize that the consumer financial laws—including the Consumer Financial Protection Act and, in appropriate circumstances, the Equal Credit Opportunity Act—apply to fraud screening conducted as part of a transaction for a consumer financial product or service. Moreover, because “fraud screening” is used to assess credit-worthiness by determining who gets offered or approved for a financial product, firms that compile and provide such information are typically subject to the requirements of the Fair Credit Reporting Act. While companies must take steps to limit fraud, that should never be an excuse to violate the law.8
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