- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Jeff Dale2023-09-20T18:57:00
The Consumer Financial Protection Bureau (CFPB) warned lenders using artificial intelligence (AI) in credit denials that consumers must receive accurate and specific reasoning—and not checklists—for why a credit request was denied.
In a press release Tuesday, the agency said, “[C]reditors cannot simply use CFPB sample adverse action forms and checklists if they do not reflect the actual reason for the denial of credit or a change of credit conditions.”
In June, the Federal Reserve Bank of New York released its quarterly credit analysis survey. The survey found the overall rejection rate for credit applicants increased to 21.8 percent, the highest level since June 2018.
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The Consumer Financial Protection Bureau is seeking greater authority to supervise the activities of companies that offer services like digital wallets and payment apps on par with how the agency oversees large banks, credit unions, and other financial institutions.
Eric Halperin, enforcement director at the Consumer Financial Protection Bureau, said his office will be adding 75 new full-time employees as part of an expansion of its efforts to protect consumers from misuse of their personal data.
Credit reporting agency TransUnion agreed to pay $23 million total across settlements with the Consumer Financial Protection Bureau and Federal Trade Commission for alleged tenant screening and security freeze deficiencies.
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network issued an alert to financial institutions about their obligations to report deepfakes, warning artificial intelligence has given bad actors additional tools in their arsenal.
A nationwide rental outlet affiliated with Rent-a-Center and its chief executive have been sued by the Consumer Financial Protection Bureau for allegedly deceiving five million consumers about the terms of credit agreements.
A lack of risk visibility is causing companies to reject customers–and potentially lose money–over fears they might be in danger of violating rules around anti-money laundering and sanctions regulations.
