The fintech said the move was motivated by a need to keep its risk models accurate and due to changing priorities at the bureau.

Researchers looking at application denial rates and interest rates found that racial disparities exist for both Black and Hispanic borrowers even when controlling for various credit factors.

Federal regulators recently elaborated on their goals behind last month’s interagency Community Reinvestment Act proposal, which some fair lending advocates believe is not going to advance racial equity.

Mortgage lenders and brokers who participated in a small business review panel convened by the CFPB support making AVMs more accurate but are concerned about downstream financial and business impacts.

The CFPB reiterated that the Equal Credit Opportunity Act requires creditors to provide consumers notice if they decide to take an adverse action, even if it’s based on a “black-box” credit model.

Industry stakeholders have raised concerns that the use of qualitative factors and examiner judgment in evaluation of CRA-related activities can lead to inconsistent interpretations of the law.

The request comes in the wake of a media report that, of all large lenders, Wells Fargo had the biggest disparity between Black and white homeowners in refinancing approval rates.

For its part, the CFPB said it will take an “active leadership role” on the Federal Financial Institutions Examination Council’s Appraisal Subcommittee.

Without proper safeguards, the bureau warned, flawed versions of automated valuation models could “digitally redline certain neighborhoods and further embed and perpetuate historical lending disparities.”

The DOJ said its support of the Fair Housing Act lawsuit underscores the Biden administration’s seriousness in addressing ongoing legacies of residential segregation and discrimination.