Equal Credit Opportunity Act / Regulation B (AI and algorithmic credit decisions)
United States · 15 U.S.C. § 1691; 12 C.F.R. Part 1002
Lenders cannot discriminate in credit decisions and must give you specific, accurate reasons when they deny or worsen your credit — even if the decision was made by an AI model. Earlier CFPB guidance said lenders can't hide behind 'black box' algorithms; that guidance was withdrawn in May 2025, but the underlying statute and regulation still require accurate adverse-action notices.
Technical detail
15 U.S.C. § 1691 and 12 C.F.R. Part 1002 (Regulation B) prohibit credit discrimination on protected bases and require creditors to provide adverse action notices with specific principal reasons (12 C.F.R. § 1002.9), regardless of whether decisions are made by AI models.
Who is protected: Credit applicants, including those evaluated by AI/algorithmic underwriting
Who must comply: Creditors and lenders, including those using AI or machine-learning underwriting models
Key facts
| Jurisdiction | United States |
|---|---|
| Level | Federal |
| Status | In effect |
| Protection strength | Stronger protection |
| Effective date | 1975-10-28 |
| Enacted | 1974-10-28 |
| Citation | 15 U.S.C. § 1691; 12 C.F.R. Part 1002 |
| Enforced by | Consumer Financial Protection Bureau; federal banking agencies; DOJ; FTC |
| Private right of action | Yes — individuals can sue |
| Penalties | Actual damages; punitive damages up to $10,000 (individual actions) or the lesser of $500,000 or 1% of creditor net worth (class actions) |
| Topics | housing and credit decisions · automated decision-making · consumer protection · AI disclosure and transparency |
| Last verified | 2026-06-10 |
| Official source | Consumer Financial Protection Circular 2023-03 (adverse action notification, Regulation B) ↗ |
More AI rules in United States
- FTC Act Section 5 (unfair/deceptive AI) · In effect
- TAKE IT DOWN Act · In effect
- FCRA (AI in credit & background checks) · In effect
- Title VII / ADA (AI hiring) · In effect
- COPPA + 2025 Rule (childrens data) · In effect
- TCPA (AI voice calls) · In effect
Related housing and credit decisions rules elsewhere
- Colorado AI Act (repealed) · Repealed / replaced
- SB 26-189 (Colorado ADMT Law) · Enacted (not yet in effect)
- New York S7882 (felony to use algorithms to coordinate residential rents) · In effect
- DC Algorithm Bill (not enacted) · Expired
- MA AG · In effect
- NJ AG Platkin / DCR · In effect
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