An AI auditor needs to test whether an AI-assisted lending decision system satisfies the Equal Credit Opportunity Act (ECOA)'s adverse action notice requirement. What audit procedure is MOST direct?
Select an answer to reveal the explanation.
Short Explanation and Infographic
Here's the deal — a is correct because ECOA and Regulation B require that adverse action notices provide the principal specific reasons for credit denial — auditing a sample of notices against the model's stated contributing factors directly tests compliance with this requirement. B is not required by ECOA.
Full explanation below image
Full Explanation
A is correct because ECOA and Regulation B require that adverse action notices provide the principal specific reasons for credit denial — auditing a sample of notices against the model's stated contributing factors directly tests compliance with this requirement. B is not required by ECOA. C does not fulfill the adverse action notice requirement. D tests model performance, not regulatory compliance.