The CFPB announced that it will hold its first Tech Sprint on October 5-9, 2020, with the participating teams to be focused on “developing a range of innovative approaches to electronically-delivered adverse action notices” and is seeking applicants to participate.
The Bureau indicated that in addition to conducting the Tech Sprint, it is considering “a range of possible policy actions with respect to adverse action notices and also to electronic disclosure more generally.” It intends to use approaches to disclosure explored in the Tech Sprint to help inform its evaluation of whether particular statements of policy, rulemaking, or other actions in these areas may be appropriate.
In a notice published in September 2019 seeking ideas on how it could use Tech Sprints to advance regulatory innovation and compliance, the CFPB described Tech Sprints as a model that:
gather[s] regulators, technologists, financial institutions, and subject matter experts from key stakeholders for several days to work together to develop innovative solutions to clearly-identified challenges. Small teams include participants from both the regulator and a diversity of entities to ensure the inclusion of regulatory, industry, and technology perspectives. The regulator assigns a specific regulatory compliance or market problem to each team and challenges the teams to solve or mitigate the problems using modern technologies and approaches. The teams then work for several days to produce actionable ideas, write computer codes, and present their solutions. On the final day, each team presents to an independent panel of judges that selects winners. The most promising ideas can then be further developed either in collaboration with the regulator or by external parties.
The CFPB stated that the teams participating in the October Tech Sprint will be asked to show how their innovations improve on current notices to better realize the following core ECOA and FCRA goals:
- Accuracy – using accurate information to take adverse action
- Anti-discrimination – preventing illegal discrimination in credit decisions
- Education – helping consumers fare better in future credit applications
Potential applicants are advised that “[s]o long as they represent such improvement, sprint-developed innovations do not need to conform to existing rules, sample forms, or official interpretations” and that they “may assume that consumers have consented to the receipt of electronic disclosures.” They are also advised that “[i]nnovations may concern any aspect, or potential aspect, of adverse action communication, including its development or use. Participants may—but do not have to—address adverse actions based on the use of machine learning algorithms or data not found in traditional credit reports.” Tech Sprint participants can apply under the Bureau’s Trial Disclosure Policy to use their disclosure innovations in a market setting.
The Bureau provided the following non-exhaustive, nonbinding list of areas that might be involved in improvements offered in the Tech Sprint:
- Providing additional information or educational content that makes the notice more actionable or otherwise of greater utility and value to the consumer
- Using dynamic, interactive, or other functionality that makes the notice more actionable or otherwise of greater utility and value to the consumer
- Refining methods for translating model factors into reasons for adverse action, focusing on, for example: the specificity and accuracy of the reason language; the number of reasons given; the mapping of multiple model variables to single reasons; or how potential interactions between model variables are explained
- Giving consumers useful information about how the creditor identified the principal reasons for adverse action
- Proposing or comparing methodologies for identifying principal reasons for adverse action when algorithms—including algorithms that make use of machine learning—are used to take such action
- Exploring how adverse action reasons can be used to identify common barriers to credit access or other trends
To participate in the October Tech Sprint, the Bureau is seeking disclosure experts, designers, developers, consumer advocates, consultants, technologists, and legal or compliance specialists from a range of professional backgrounds. Participants can apply as a team or as individuals and later be formed into a team. Applications must be submitted by September 11, 2020.