Clause · Banking & Finance
Clause and customer disclosure for AI-assisted credit decisioning (explanation and human review)
Three linked texts for lenders using AI in credit assessment: a model-supplier clause on explainability, testing and records; customer-facing disclosure aligned with APP 1.7 from 10 December 2026; and a human-review procedure.
- Kind
- Clause. Wording to drop into a longer document.
- Where it applies
- Australia, European Union
- AI use
- Yellow AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at
- 17 October 2026
- Status
- Maintained. Checked on 17 October 2026 against the 7 authorities it cites, for Australia and European Union.
- Version
- 1
- Source
- Written for this library
When to use it
Use for credit providers and licensees adopting or contracting for AI credit scoring or assessment tools. It does not replace responsible lending analysis under the NCCP Act or a privacy impact assessment.
How AI may be used
AI can draft plain-language disclosures and contract variants. Responsible lending compliance and the human-review mechanism are designed and checked by lawyers.
AI may
- Draft plain-language versions of the customer disclosure at a set reading level
- Map the supplier clause against the vendor’s standard terms and list gaps
- Prepare the human-review procedure from the lender’s existing credit policy
AI must not
- Must not decide that an AI-assisted assessment satisfies ss 128 to 131 of the NCCP Act
- Must not describe the model’s accuracy or fairness beyond the test evidence supplied
- Must not process applicant data or credit reports in an unapproved tool
The lawyer checks
- Privacy policy text accurately describes the kinds of decisions and information used, as APP 1.8 requires
- Human review is real: reviewers have authority, information and time to override the model
- Customer statements about AI use are accurate and not misleading
Method: how the Green, Yellow and Red levels are decided. This is guidance for planning, not legal advice.
Official form
Open the official form. Always use the current version from the issuer.
Read the full text
The full text is for signed-in accounts. It is free. When you sign in you can:
- read the whole precedent, with its drafting notes beside it;
- copy it, or download it as a Word file or Markdown;
- add it to your firm’s knowledge base, so colleagues can find it;
- let the AI tools you connect read it from that knowledge base.
The summary, the law it rests on and the AI-use guidance above stay public. Privacy.
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