On February 16, 2017, the CFPB issued a Request for Information regarding use of alternative data and modeling techniques in the consumer lending “credit process.” The CFPB defines the “credit process” broadly as all processes and decisions made by a creditor during the full life cycle of the credit product, including marketing, pre-screening, fraud prevention, application, underwriting, account management, credit authorization, setting of pricing and terms, and servicing and collection of debts. According to the Bureau, it is seeking information about the benefits and risks of using alternative data and modeling techniques in consumer lending as the agency begins to consider future activity to encourage responsible use of these techniques and reduce regulatory burdens that could impede their use. The Bureau is also interested in information as it relates to small business lending.
Read our client alert.