FOR IMMEDIATE RELEASE
July 1, 2021
Media Contact: Izzy Woodruff | 202-898-1661 | Iwoodruff@nationalfairhousing.org
Leading Civil Rights, Consumer, and Technology Advocates Urge the Federal Financial Regulators to Promote Equitable Artificial Intelligence in Financial Services
Washington, D.C. — A diverse group of leading civil rights, consumer, and technology advocates have submitted a detailed and comprehensive letter to the federal financial regulators in response to their Request for Information and Comment on Financial Institutions’ Use of Artificial Intelligence, including Machine Learning (“RFI”). The RFI was jointly issued on March 31, 2021, by the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency.
This RFI comes at a time when the United States is once again at a critical crossroads in determining whether to develop equitable systems that serve and uplift the whole of the national financial services market, or systems that perpetuate, amplify, and even exacerbate existing discriminatory patterns. The advocates believe that the time to act is now as the use of artificial intelligence (“AI”) in financial services proliferates in every aspect of consumer financial services and has the potential for far-reaching adverse impacts for borrowers of color and other protected groups that could overshadow even the devastation of past government policies.
“There is so much work to be done to address centuries of redlining, segregation, a widening wealth gap, and other biased policies that are unfortunately woven into our nation’s fabric,” said Lisa Rice, President and CEO of the National Fair Housing Alliance (NFHA). “Government, industry, and advocacy groups should work together to ensure that AI systems support non-discriminatory and equitable housing and finance markets. This is simply the right thing to do, and it will benefit individual consumers and our whole society.”
The advocates believe it is critically important that the federal financial regulators address the following:
- Non-Discrimination and Equity: The regulators should take the steps needed to ensure non-discriminatory and equitable outcomes for all who participate in the financial services market. Most importantly, the Agencies should define “model risk” to include the risk of discriminatory or inequitable outcomes for consumers, rather than just the risk of financial loss to a financial institution.
- Action Plan: After review of the RFI responses, the regulators should immediately issue a detailed action plan.
- Robust Supervision and Enforcement: The regulators should conduct in-depth reviews of financial institutions’ use of AI, including assessing compliance with fair lending laws. Where a financial institution’s use of AI indicates weaknesses or violations of law, the regulators should act quickly to address and prevent consumer harm.
- Actionable Policies: The regulators should move quickly to issue actionable policy statements that clearly state their commitment to consumer protection and civil rights laws, including fair lending laws; insight into their supervisory expectations and methods; and useful guardrails and best practices.
- Public Research: The regulators should support public research that analyzes the efficacy of specific uses of AI in financial services and the impact of AI in financial services for consumers of color and other protected classes.
- Specialized Fair Lending and AI Staff: The regulators should immediately begin hiring staff with specialized skills that can provide guidance to financial institutions on assessing the impact of AI systems and that can review those assessments, particularly with respect to fair lending risks.
- Fair Lending Training for All AI Stakeholders: The regulators should ensure that all AI stakeholders—including regulators, financial institutions, and tech companies—receive regular fair lending and racial equity training.
- Diversity, Equity, and Inclusion: The regulators should ensure that staff working on AI issues reflect diversity, including diversity based on race and national origin. In addition, the regulators should encourage financial institutions to engage diverse staff for the AI development and design teams.
- Transparency: The regulators should strive to share their data, models, decisions, and proposed solutions so that all of the key stakeholders can stay apprised of and comment on the potential impact of proposed actions on the national consumer financial market. Second, the regulators should require financial institutions to share with the public as much information as possible regarding their AI systems and assessments of those systems to enable researchers and those impacted to evaluate the efficacy and impact of the systems.
- Engagement: The regulators should stay engaged with a diverse group of key stakeholders, including civil rights organizations, consumer advocates, and impacted communities in order to receive ongoing input and feedback on these important decisions.
“Through these efforts and continued innovation, we are confident we can put an end to housing and financial inequality and place underserved families in positions to participate fully in economic opportunities, own homes, and accumulate intergenerational wealth,” added Ms. Rice.
The response to the RFI was issued jointly by the following organizations:
American Civil Liberties Union
Americans for Financial Reform Education Fund
California Reinvestment Coalition
Center for Democracy & Technology
Center for New York City Neighborhoods, Inc.
Center for Responsible Lending
Center on Race, Inequality, and the Law
Consumer Federation of America
East Metro Civic Alliance
Equal Rights Center
Fair Housing Advocates Association
Fair Housing Advocates of Northern California
Fair Housing Center of Central Indiana
Fair Housing Center of Northern Alabama
Fair Housing Center of Southwest Michigan
Fair Housing Center of West Michigan
Fair Housing Council of Greater San Antonio
Housing Equality Center of Pennsylvania
Illinois People’s Action
Lawyers’ Committee for Civil Rights under Law
The Leadership Conference on Civil and Human Rights
Liberation in a Generation
Long Island Housing Services, Inc.
Louisiana Fair Housing Action Center
Miami Valley Fair Housing Center
NAACP Legal Defense and Educational Fund, Inc. (LDF)
National Community Reinvestment Coalition
National Consumer Law Center (on behalf of its low-income clients)
National Council of Asian Pacific Americans
National Fair Housing Alliance
New York University, Center for Critical Race & Digital Studies
North Texas Fair Housing Center
Philadelphia Unemployment Project
South Suburban Housing Center
Student Borrower Protection Center
The National Fair Housing Alliance (NFHA) is the country’s only national civil rights organization dedicated solely to eliminating all forms of housing and lending discrimination and ensuring equal opportunities for all people. Through its homeownership, credit access, tech equity, education, member services, public policy, community development, and enforcement initiatives, NFHA works to dismantle longstanding barriers to equity and build diverse, inclusive, well-resourced communities.