WASHINGTON–The CFPB said it is “sharpening its focus” on digital redlining and algorithmic bias as the result of the growing influence of financial technology platforms.
The CFPB included the insight as part of a 40-page fair lending report covering the Bureau’s 2021 activities.
According to the report, “As more technology platforms, including Big Tech firms, influence the financial services marketplace, the CFPB will be working to identify emerging risks and to develop appropriate policy response.”
In terms of regulatory activity, the Bureau said it is participating in interagency rulemaking processes with the Federal Reserve Board, Office of the Comptroller of the Currency, Federal Deposit Insurance Corp, National Credit Union Administration, and Federal Housing Finance Agency to develop regulations to implement the amendments made by the Dodd-Frank Act to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) concerning automated valuation models.
Mulling Proposal
The report added, “To address potential fair lending risk in models, the CFPB is considering proposing a requirement that covered institutions establish policies, practices, procedures, and control systems to ensure that their AVMs comply with applicable nondiscrimination laws.”
For more information: Fair Lending Report of the Consumer Financial Protection Bureau May 2022
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