Consumer Financial Protection Bureau (CFPB) (29)

Topics and Issues

Artificial Intelligence (8)

Machine Learning (4)

On July 7, 2020, the CFPB put out an Innovation Spotlight blog, Providing adverse action notices when using AI/ML models.  The posting notes that one area of innovation the CFPB is “monitoring is artificial intelligence (AI), and particularly a subset of AI, machine learning (ML). For example, in 2017, the Bureau issued a Request for Information Regarding Use of Alternative Data and Modeling Techniques in the Credit Process (RFI). We also issued a No-Action Letter to Upstart Network, Inc., a company that uses ML in making credit decisions, and later shared key highlights from information provided by Upstart.”  While “AI has the potential to expand credit access by enabling lenders to evaluate the creditworthiness of some of the millions of consumers who are unscorable using traditional underwriting techniques[,] it may create or amplify risks, including risks of unlawful discrimination, lack of transparency, and privacy concerns. Bias in the source data or model construction can also lead to inaccurate predictions. In considering AI or other technologies, the Bureau is committed to helping spur innovation consistent with consumer protections.”