ECOA / Regulation B (AI credit discrimination)
Equal Credit Opportunity Act / Regulation B (AI and algorithmic credit decisions)
United States · 15 U.S.C. § 1691; 12 C.F.R. Part 1002
- Status
- In effect
- Took effect
- October 28, 1975
- Applies to
- Creditors and lenders, including those using AI or machine-learning underwriting models
- Enforced by
- Consumer Financial Protection Bureau; federal banking agencies; DOJ; FTC
Lenders cannot discriminate in credit decisions and must give you specific, accurate reasons when they deny or worsen your credit — even if the decision was made by an AI model. Earlier CFPB guidance said lenders can't hide behind 'black box' algorithms; that guidance was withdrawn in May 2025, but the underlying statute and regulation still require accurate adverse-action notices.
Who is protected: Credit applicants, including those evaluated by AI/algorithmic underwriting
Legal detail
15 U.S.C. § 1691 and 12 C.F.R. Part 1002 (Regulation B) prohibit credit discrimination on protected bases and require creditors to provide adverse action notices with specific principal reasons (12 C.F.R. § 1002.9), regardless of whether decisions are made by AI models.
Key facts
| Jurisdiction | United States |
|---|---|
| Level | Federal |
| Strength | Stronger |
| Enacted | October 28, 1974 |
| Citation | 15 U.S.C. § 1691; 12 C.F.R. Part 1002 |
| Private right of action | Yes, individuals can sue |
| Penalties | Actual damages; punitive damages up to $10,000 (individual actions) or the lesser of $500,000 or 1% of creditor net worth (class actions) |
| Topics | housing and credit decisions · automated decision-making · consumer protection · AI disclosure and transparency |
| Agency page | Consumer Financial Protection Circular 2023-03 (adverse action notification, Regulation B) |
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Related housing and credit decisions rules elsewhere
- Connecticut algorithmic rent ban — HB 8002 (eff. Jan 1, 2026) · In effect
- San Diego algorithmic rent price-fixing ban (Ord. O-21955, May 2025) · In effect
- Minneapolis algorithmic rent ban (Ord. 2025-010, eff. Mar 1, 2026) · In effect
- Seattle algorithmic rent-fixing ban (Ord. 127241 / SMC 7.34, July 2025) · In effect
- NJ Forbidding the Algorithmic Inflation of Rent (FAIR) Act · Enacted (not yet in effect)
- Hoboken Algorithmic Rent-Fixing Ban · In effect
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