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
Here’s the deal — you need to test the actual notices, so review a sample of adverse action notices and confirm they list the principal reasons for denial from the model’s top contributing factors. ECOA and Regulation B care about those specific reasons, not the scoring brand or vendor status.
Full Explanation
Reviewing a sample of adverse action notices to confirm they list the principal reasons for denial, drawn from the model's top contributing factors, is correct because ECOA and Regulation B require those specific reasons, and auditing notices against stated factors directly tests compliance. Verifying FICO scores is not required by ECOA. Confirming a CFPB-registered vendor does not fulfill the notice requirement. Testing accuracy against benchmarks checks performance, not regulatory compliance.