Required actions
- Creditors using AI or complex models must still give specific, accurate principal reasons for adverse credit decisions under ECOA and Regulation B - A model too complex to explain cannot be used for credit decisions
Home/Regulation Tracker/CFPB Circulars 2022-03 and 2023-03 — adverse action notices when using complex algorithms
CFPB Circulars 2022-03 and 2023-03 — adverse action notices when using complex algorithms
The CFPB's position that the Equal Credit Opportunity Act's explanation duty applies fully to AI credit models: lenders must give specific reasons for denials, so uninterpretable models cannot be used for credit decisions.
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