Binding law — in force
Give credit applicants the specific principal reasons for adverse action, drawn from the factors the model actually scored (Regulation B, 12 CFR 1002.9)
A creditor that takes adverse action on a credit application must notify the applicant in writing with a statement of the action and either a statement of specific reasons or a disclosure of the right to one (12 CFR 1002.9(a)(2)); the reasons must be specific and indicate the principal reasons, and saying the applicant failed the creditor's internal standards or did not reach a qualifying score on its credit scoring system is insufficient (1002.9(b)(2)). Under the Official Interpretations the reasons must describe the factors actually considered or scored, and for a credit scoring system relate only to factors actually scored, with no principal reason left out (Supp. I, comments 9(b)(2)-2 and -4). The rule never mentions AI; it is encoded as AI-adjacent (owner decision D-19, D-11 pattern 1) because model-driven credit decisions must still produce these reasons. Detect credit code where a model or LLM decision sets a declined status with no reason codes.
us-cfpb-reg-b-adverse-action.specific-principal-reasons-for-adverse-action · 12 CFR 1002.9(b)(2) · official source · jurisdictions: US