With the advancements in artificial intelligence (AI) technology, businesses around the world are considering how they can use AI to improve efficiency and advance business goals. Financial institutions are no exception. While AI can bring many efficiencies and advancements to the way business is conducted, in the highly regulated financial services industry, there are many considerations that need to be addressed by financial institutions seeking to use AI. In the context of lending, there are many credit decisioning technology platforms advertised to improve, automate and eliminate bias in credit decisioning. However, the issue of bias is not so straightforward and regulatory agencies are not backing away from this issue. The Consumer Financial Protection Bureau (CFPB) stated, “Tech marked as ‘artificial intelligence’ and as taking bias out of decision-making has the potential to produce outcomes that result in unlawful discrimination.”1 On April 25, the CFPB and other federal agencies released a joint statement regarding the use of advanced technologies, including AI. 2 CFPB Director Rohit Chopra stated, “Today’s joint statement makes it clear that the CFPB will work with its partner enforcement agencies to root out discrimination caused by any tool or system that enables unlawful decision-making.” AI IN LENDING DECISIONING AND UNINTENDED DISCRIMINATION By Shelli J. Clarkston, Spencer Fane, LLP Shelli J. Clarkston is an Of Counsel attorney in the Kansas City, Missouri office of Spencer Fane LLP. She can be reached at (816) 292-8893 and sclarkston@spencerfane.com. 22 NEBRASKA INDEPENDENT BANKER
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