CFPB AI chatbot circular
CFPB Circular 2024-05 — Improper Overdraft and AI Chatbot Practices
United States · CFPB Issue Spotlight (June 2023); CFPB UDAAP / ECOA / TILA enforcement posture (2024)
- Status
- In effect
- Took effect
- October 23, 2024
- Applies to
- Banks, credit unions, fintechs, and non-bank lenders deploying customer-facing AI
- Enforced by
- Consumer Financial Protection Bureau; state AGs (parallel UDAP authority)
Building on its 2023 chatbot report, the CFPB has warned that banks and lenders using generative-AI chatbots that mislead consumers — about fees, account terms, or credit denials — face liability under the Consumer Financial Protection Act, the Equal Credit Opportunity Act, and the Truth in Lending Act. Hallucinating chatbots are not a regulatory loophole.
Who is protected: Consumers interacting with bank, lender, or fintech AI chatbots
Legal detail
CFPB Issue Spotlight 'Chatbots in Consumer Finance' (June 2023) and follow-on Circular guidance treat AI/chatbot misstatements as UDAAPs under 12 U.S.C. § 5536, ECOA adverse-action obligations under 15 U.S.C. § 1691, and TILA disclosure rules. CFPB has investigated several large banks' AI chatbot deployments.
Key facts
| Jurisdiction | United States |
|---|---|
| Level | Federal |
| Strength | Moderate |
| Enacted | October 23, 2024 |
| Citation | CFPB Issue Spotlight (June 2023); CFPB UDAAP / ECOA / TILA enforcement posture (2024) |
| Private right of action | No, agency enforcement only |
| Penalties | CFPA civil money penalties (tiered up to ~$1.36M/day for knowing violations), restitution, injunctive relief |
| Topics | consumer protection · automated decision-making · housing and credit decisions |
| Agency page | Chatbots in Consumer Finance (Issue Spotlight) |
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- NAIC AI Evaluation Tool Pilot (12 states, 2026) · Proposed / pending
- FTC Proposed Policy Statement — AI Accuracy (July 2026) · Proposed / pending
Related consumer protection rules elsewhere
- Missouri AI Therapy Chatbot Ban (SB 1019) · In effect
- Vermont Data Broker Law (H.211) · Enacted (not yet in effect)
- Arkansas Frank Broyles Act AI amendment — voice and likeness protection (2025) · In effect
- PA v. Character.AI (Fake Psychiatrist Chatbot) · Blocked / in litigation
- NAACP v. xAI (Colossus 2 Air Pollution) · Blocked / in litigation
- RI Therapy Chatbot Ban (2026) · In effect
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