This bill allows consumers to challenge automated decision systems in housing and lending if they cause disparate impacts on protected classes, with an affirmative defense for covered entities.
If you use AI in housing or lending decisions in New Jersey, you must conduct algorithmic impact assessments every two years or face fines.
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Affected Industries
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What This Means
New Jersey's S4279 bill introduces a legal framework for consumers to challenge automated decision systems that may lead to discriminatory outcomes. It mandates businesses in housing and lending to conduct regular assessments of their AI systems and provides consumers with rights to notice and human review. This legislation aims to ensure fairness and accountability in automated decision-making processes.
Key Provisions
- Prohibits use of automated decision systems that result in disparate impacts on protected classes.
- Requires covered entities to conduct algorithmic impact assessments every two years.
- Mandates clear notice to individuals when automated systems are used in decisions.
- Gives individuals the right to request human review of automated decisions.
- Establishes penalties for non-compliance, including fines of at least $5,000.
- Holds covered entities liable for the actions of their agents and vendors.
- Provides an affirmative defense for covered entities demonstrating a substantial, legitimate, nondiscriminatory purpose.
Latest Legislative Action
Introduced in the Senate, Referred to Senate Commerce Committee
Bill Sponsors
| Name | Role | District |
|---|---|---|
| Troy Singleton D | Sponsor | SD-007 |
Compliance Checklist
Who: Covered entities using automated decision systems
Deadline: Every two years
Penalty: Fines of at least $5,000 for non-compliance
Who: Covered entities making housing or credit decisions
Deadline: At the time of decision
Penalty: Fines of at least $5,000 for failure to notify
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