CFPB, Federal Agencies, State Agencies, and Attorneys General
The CFPB recently issued a new no-action letter (NAL) to Upstart Network, Inc. regarding its automated model for making underwriting and pricing decisions on applications by consumers for unsecured, closed-end loans. Upstart uses artificial intelligence techniques and alternative data in its model.
The new NAL is essentially a renewal of the NAL issued to Upstart in September 2017, which was the first NAL issued by the CFPB. … Continue Reading
The CFPB recently published a blog post titled, “Innovation spotlight: Providing adverse action notices when using AI/ML models.”
The blog post primarily recycles information from the Bureau’s annual fair lending report issued in May 2020. The Bureau indicates that artificial intelligence (AI) and a subset of AI, machine learning (ML), is an area of innovation that it is monitoring.… Continue Reading
Andrew Smith, Director of the FTC Bureau of Consumer Protection, has written a blog post, “Using Artificial Intelligence and Algorithms,” in which the FTC “offer[s] important lessons about how companies can manage the consumer protection risks of AI and algorithms.”
The blog post makes the following key points:
On February 12, 2020, the House Financial Services Task Force on Artificial Intelligence will hold a hearing titled, “Equitable Algorithms: Examining Ways to Reduce AI Bias in Financial Services.”
The Committee Memorandum flags a number of issues that could be the focus of comments and questions from lawmakers. Those issues include the potential for data sets used in AI to “contain errors, [be] incomplete, and/or contain data that reflects societal or historical inequities,” challenges in applying the existing legal framework (ECOA, FHA, FCRA) to AI technologies, and risks of “regulatory sandboxes.” … Continue Reading
In this podcast, we are joined by Scott Ferris, CEO of Attunely, a provider of machine learning (ML) and artificial intelligence (AI) technology to the debt collection industry. We look at how changes in consumer behavior have impacted collections, technology’s role in collections, state law’s/GDPR’s impact on ML/AI and compliance strategies, how ML/AI can improve profitability, and perceived impediments to adopting ML/AI.… Continue Reading
Tomorrow, October 18, the House Financial Services Committee’s Task Force on Artificial Intelligence is scheduled to hold a hearing entitled “AI and the Evolution of Cloud Computing: Evaluating How Financial Data is Stored, Protected, and Maintained by Cloud Providers.” There will be a live webcast of the hearing.
The Committee Memorandum and related legislation can be found here.… Continue Reading
The House Financial Services Task Force on Artificial Intelligence will hold a hearing entitled, “The Future of Identity in Financial Services: Threats, Challenges, and Opportunities,” at 9:30 a.m. on Thursday, September 12, 2019, in room 2128 of the Rayburn House Office Building.
The memo to the FSC Majority Staff indicates the hearing will focus on artificial intelligence and the risks involved in the way that consumers identify themselves and have their identities verified in the financial marketplace, particularly online.… Continue Reading
A new CFPB blog post titled “An update on credit access and the Bureau’s first No-Action Letter” provides a boost to lenders using alternative data and machine learning in their underwriting models.
The Bureau issued its first (and so far only) no-action letter in September 2017 to Upstart Network Inc.… Continue Reading
The Consumer Education Foundation, a California-based nonprofit consumer advocacy organization, has filed a petition with the FTC asking it to investigate the use of “secret surveillance scores” in the U.S. marketplace.
Such scores are claimed to be the product of analytics companies that “amass thousands or even tens of thousands of demographic and lifestyle data points about consumers, with the help of an estimated 121 data brokers and aggregators who are able to purchase our personal data from consumer-facing companies across the global marketplace.” … Continue Reading
This week, Congress will be holding a hearing focused on fintech and two hearings at which artificial intelligence (AI) will be the focus.
Fintech:
Tomorrow, June 25, the House Financial Services Committee’s Task Force on Financial Technology will hold a hearing titled, “Overseeing the Fintech Revolution: Domestic and International Perspectives on Fintech Regulation.”… Continue Reading
