A retail bank is deploying an AI system that automatically denies credit card applications. Under ECOA and Regulation B, what notification requirement applies to each automated denial?
Select an answer to reveal the explanation.
Short Explanation and Infographic
Here's the deal — b is correct because ECOA and Regulation B require creditors to provide adverse action notices that include specific reasons for credit denial to all applicants, within 30 days of the decision. This applies regardless of whether the decision was made by a human or an AI model.
Full explanation below image
Full Explanation
B is correct because ECOA and Regulation B require creditors to provide adverse action notices that include specific reasons for credit denial to all applicants, within 30 days of the decision. This applies regardless of whether the decision was made by a human or an AI model. The use of AI does not exempt the bank from adverse action notice requirements. Notification requirements apply to all applicants (D), not just protected class members. Accuracy disclosure (C) is not a Regulation B requirement. No exemption exists for validated AI models (A).