- 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.
THIS IS MEMBERS-ONLY CONTENT. To continue reading, choose one of the options below.
News and analysis for the well-informed compliance or audit exec.
Annual Membership best value
Subscribe now for $365
Our lowest price ($1 per day) for one year.
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.
A Bank of England report warned of private equity risk management deficiencies as interest rates remain stagnant, with international coordination important.
Compliance departments at financial institutions must become more involved in ensuring their firm’s operational resiliency to address emerging risks, the Treasury Department’s Office of the Comptroller of the Currency said in its semi-annual risk perspective.
Compliance has been “sleeping on” artificial intelligence, two panelists discussed at Compliance Week’s Women in Compliance Summit. The profession should be positioned to lead on AI governance at the business level.
