The CFPB's Position Regarding Use of Artificial Intelligence in Underwriting Consumer Loans
With increasing frequency, creditors are using credit scores created by artificial intelligence (AI) instead of legacy score providers. The conventional wisdom is that AI credit scores are more predictive of an applicant’s ability and intent to repay a loan than other methods and enables lenders to approve more loan applications without taking on added credit risk. One of the most controversial issues facing the Consumer Financial Protection Bureau (CFPB) is how to deal with the fair lending and Fair Credit Reporting Act implications of creditors using AI to underwrite consumer loans. There seems to be a great deal of suspicion at the Bureau as to whether these AI generated credit scores comply with the Equal Credit Opportunity Act and the Fair Credit Reporting Act.
During this webcast, John Culhane and Mike Gordon, partners in Ballard Spahr's Consumer Financial Services Group, and Teddy Flo, the General Counsel and Secretary of Zest AI, a company that provides software enabling lenders to use AI to underwrite loans, will explore these issues and more. They will discuss:
- The CFPB’s pronouncements regarding its fair lending concerns about companies using AI to underwrite consumer loans
- Will the CFPB use the disparate impact theory in determining whether a lender’s use of AI to underwrite loans violates ECOA?
- Did the CFPB’s recently released guidance shed any light on the reasons for adverse action that companies using AI to underwrite loans should provide?
- The speakers' experience with CFPB examinations of lenders’ use of AI to underwrite loans and what we have learned from that
- Will the CFPB be using enforcement to attack AI loan underwriting programs?
- Practical advice for companies using AI to underwrite loans, including preparation for CFPB exams
- Should companies worry about whistleblowers?
- The next frontier: The use of AI in servicing and collecting loans and in marketing and soliciting loans
This program is approved for 1.0 CLE credits in CA, NJ, & NY. Uniform Certificates of Attendance will be provided for the purpose of seeking CLE credit in other states. Please note: CLE credit in the following states will not be available: NV and PA.
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