Governance
FCRA / ECOA
FCRA (Fair Credit Reporting Act) and ECOA (Equal Credit Opportunity Act) are US federal statutes governing credit reporting and lending decisions. AI in lending must produce explainable adverse-action notices that satisfy ECOA's 'specific reasons' requirement and FCRA's accuracy and dispute-handling rules. Black-box lending models without explainability layers do not pass regulator review and create class-action risk.
FCRA / ECOA in practice
For Canadian lenders these US statutes cover only US lending. In Canada, AI credit decisions fall under PIPEDA or provincial privacy law and human rights legislation, and federally regulated institutions also plan for OSFI Guideline E-23 on model risk, which takes effect May 1, 2027. The shared requirement is being able to explain each adverse decision in specific terms. Remolda maps these rules for banks and credit unions.
Related terms
- AI Governance · Governance
- Model Risk Management (MRM) · Governance