Consumer financial services partner Darren Welch joined Joseph Kamyar for the latest episode of “Fintech Focus” to discuss AI safety in the fair lending and consumer protection. Tune in to the podcast to hear how U.S. regulators are reacting to the increased use of AI in this context, how lenders can mitigate risk and what we’re starting to see at the state level regarding AI protection laws.
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When it comes to AI in the consumer financial See more +
Consumer financial services partner Darren Welch joined Joseph Kamyar for the latest episode of “Fintech Focus” to discuss AI safety in the fair lending and consumer protection. Tune in to the podcast to hear how U.S. regulators are reacting to the increased use of AI in this context, how lenders can mitigate risk and what we’re starting to see at the state level regarding AI protection laws.
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When it comes to AI in the consumer financial services context, U.S. laws lag somewhat behind the technology. But as Darren Welch explains in this edition of “Fintech Focus,” regulators are indeed targeting AI. Skadden consumer financial services partner, Darren Welch joins host Joseph Kamyar in this episode of “Fintech Focus” for a discussion on AI in the fintech sector, specifically fair lending and consumer protection. Darren breaks down how regulators enforce transparency in lending decisions and how lenders can mitigate risk. He notes: “We’ve worked with a lot of clients on helping them set up their fair lending testing protocols and responding to regulatory inquiries about fair lending testing.”
Top takeaways from this episode
? Behind the Curve? As we have not seen comprehensive regulations from financial regulators governing AI, regulators have been applying existing credit protection laws — many of which were passed in the 1960s or 1970s — to AI, which as Darren notes is not always the best fit.
? Lender Transparency: The Consumer Financial Protection Bureau (CFPB) uses adverse action notification requirements under the Equal Credit Opportunity Act to enforce transparency in lending decisions that were driven by AI.
? AI Chatbots: The CFPB has raised legal compliance issues with chatbots, including examining if chatbots are providing accurate information, whether consumers might invoke statutory rights to dispute a transaction in a chatbot session and if a chatbox session fulfills the Dodd-Frank Act requirement that large banks and credit unions respond to consumer requests for information about their financial products. See less -
