---
title: "Clause and customer disclosure for AI-assisted credit decisioning (explanation and human review)"
url: "https://ailawframework.com/precedents/banking-and-finance/ai-credit-decisioning-clause"
type: "precedent"
site: "AI Law Framework"
id: "a3-ai-credit-decisioning-clause"
area_id: "A3"
kind: "clause"
ai_level: "yellow"
version: 1
law_stated_as_at: "2026-10-17"
---

# 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;…

Canonical page: https://ailawframework.com/precedents/banking-and-finance/ai-credit-decisioning-clause  
Law stated as at: 2026-10-17

Site index for agents: https://ailawframework.com/llms.txt

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.

## Key facts

- Kind: Clause. Wording to drop into a longer document.
- Practice area: [Banking & Finance](https://ailawframework.com/precedents/banking-and-finance.md)
- Jurisdictions: Australia, European Union
- AI level: Yellow. AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at: 2026-10-17
- Status: Maintained. Checked on 2026-10-17 against the 7 authorities it cites, for Australia and European Union.

## 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

## Authorities

- [National Consumer Credit Protection Act 2009 (Cth) ss 128–133 (assessment of unsuitability)](https://www.legislation.gov.au/C2009A00134/latest/text)
- [Privacy Act 1988 (Cth) Pt IIIA (credit reporting) and Sch 1, APPs 1, 6 and 11](https://www.legislation.gov.au/C2004A03712/latest/text)
- [Privacy and Other Legislation Amendment Act 2024 (Cth) Sch 1 Pt 15 (APP 1.7–1.9, from 10 December 2026)](https://www.legislation.gov.au/C2024A00128/asmade/text)
- [Australian Securities and Investments Commission Act 2001 (Cth) s 12DA](https://www.legislation.gov.au/C2004A00819/latest/text)
- [ASIC, Report 798 Beware the gap: Governance arrangements in the face of AI innovation (29 October 2024)](https://www.asic.gov.au/regulatory-resources/find-a-document/reports/rep-798-beware-the-gap-governance-arrangements-in-the-face-of-ai-innovation)
- [Regulation (EU) 2024/1689 (AI Act) Annex III point 5(b), arts 26, 27 and 86](https://eur-lex.europa.eu/eli/reg/2024/1689/oj/eng)
- [Regulation (EU) 2026/1744 (Digital Omnibus on AI)](https://eur-lex.europa.eu/eli/reg/2026/1744/oj/eng)

## Official form

[Official form](https://www.asic.gov.au/regulatory-resources/find-a-document/reports/rep-798-beware-the-gap-governance-arrangements-in-the-face-of-ai-innovation)

## Full text and drafting notes

The full text and the drafting notes are not part of this public page. Signed-in firm accounts can read them at https://ailawframework.com/precedents/banking-and-finance/ai-credit-decisioning-clause and through the signed-in MCP connector https://ailawframework.com/mcp/firm.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*