The Consumer Financial Protection Bureau (CFPB) issued guidance about certain legal requirements that lenders must adhere to when using artificial intelligence and other complex models. The guidance describes how lenders must use specific and accurate reasons when taking adverse actions against consumers. This means that creditors 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. This requirement is especially important with the growth of advanced algorithms and personal consumer data in credit underwriting. Explaining the reasons for adverse actions help improve consumers’ chances for future credit, and protect consumers from illegal discrimination. Read more
Kentucky Federal District Court Issues Order Enjoining the CFPB From Enforcing the Small Business Data Collection Rule as to All Companies Effected by the Rule
Banks, debt collectors, and other companies said the Consumer Financial Protection Bureau lacks the authority to make specific rules governing medical credit cards and other financial products patients use to help pay health-care bills.
The CFPB, along with the the Treasury Department and the Department of Health and Human Services, in July sent out a request for information on the prevalence of medical payment products in the health-care market, and the potential problems they pose for patients and their families.
But health-care credit cards and other targeted products operate much in the same way as financing products in other sectors, so there’s no need for new rules, trade groups representing banks and debt collection agencies said in comment letters to the CFPB ahead of a deadline last week. Health-care providers groups also warned that overregulating such products could lead to people postponing necessary but expensive procedures.
What’s more, the CFPB doesn’t have the power to bring new regulations for medical payment products, the financial services industry said in its letters. Read more