# SB 24-205: Consumer Protections for Artificial Intelligence (Colorado Artificial Intelligence Act)

Source: https://www.bankingnewsai.com/ai-regulation/documents/co-sb24-205
Last updated: Aug 26, 2026

SB 24-205, signed May 17, 2024, was the first comprehensive US state AI law. It required developers and deployers of 'high-risk' AI systems — those that are a substantial factor in consequential decisions such as credit or lending — to use reasonable care to avoid algorithmic discrimination, run impact assessments, maintain risk-management programs, and notify consumers of adverse decisions. Originally effective February 1, 2026, it was delayed to June 30, 2026 and then repealed and reenacted by SB 26-189 before ever taking effect.

## At a glance

| Field | Value |
| --- | --- |
| Authority | [Colorado AI Act](https://www.bankingnewsai.com/ai-regulation/colorado-ai-act) |
| Type | Statute |
| Status | Superseded |
| Published | May 17, 2024 |
| Applies to | Developers and deployers of high-risk AI systems making consequential decisions for Colorado consumers, including financial or lending services; banks and credit unions under equivalent prudential guidance were deemed compliant |
| Official text | https://leg.colorado.gov/bills/sb24-205 |

## Key points

- Defined 'high-risk artificial intelligence system' as one that makes or is a substantial factor in a consequential decision, expressly including decisions affecting access to financial or lending services
- Imposed a duty of reasonable care on developers and deployers to protect consumers from known or reasonably foreseeable algorithmic discrimination
- Deployers had to maintain a risk management policy and program (NIST AI RMF or ISO/IEC 42001 named as acceptable frameworks) and complete annual impact assessments
- Consumers were entitled to pre-decision notice, a statement of reasons for adverse decisions, data correction, and an opportunity to appeal to human review
- Rebuttable presumption of reasonable care for firms meeting the statutory obligations; affirmative defense for those following a recognized risk framework
- C.R.S. 6-1-1705: banks, out-of-state banks, and credit unions were deemed in full compliance if subject to examination by a state or federal prudential regulator under published guidance or regulations at least as stringent as the Act and requiring regular anti-discrimination audits of high-risk AI
- Exclusive enforcement by the Colorado Attorney General as a deceptive trade practice; no private right of action; AG rulemaking authority

## What changed for banks

It was the first US statute to name credit and lending AI as a regulated 'high-risk' category with a duty of care, impact assessments, and appeal rights — an EU AI Act-style model. For banks the headline was the prudential safe harbor, which effectively deferred to federal fair-lending and model-risk supervision. The law never took effect: business opposition, a December 2025 White House executive order naming it, and a DOJ-backed federal lawsuit led to its repeal and replacement by SB 26-189 in May 2026.

## Use cases it governs

- [Credit scoring & underwriting](https://www.bankingnewsai.com/ai-regulation/by-use-case#credit-underwriting)
- [Fair lending & discrimination](https://www.bankingnewsai.com/ai-regulation/by-use-case#fair-lending)
- [Model risk management](https://www.bankingnewsai.com/ai-regulation/by-use-case#model-risk)
- [AI governance (general)](https://www.bankingnewsai.com/ai-regulation/by-use-case#governance-general)

> Superseded by [SB 26-189](https://www.bankingnewsai.com/ai-regulation/documents/co-sb26-189).

## FAQ

### Did the Colorado AI Act SB 24-205 ever take effect?

No. Its effective date was moved from February 1, 2026 to June 30, 2026 by SB 25B-004, and SB 26-189 repealed and reenacted it on May 14, 2026, before that date.

### Did SB 24-205 exempt banks?

It deemed banks and credit unions compliant when a state or federal prudential regulator examined them under guidance substantially equivalent to or stricter than the Act. That safe harbor was removed in the replacement law, SB 26-189.

## Compare

- [EU AI Act vs Colorado AI Act](https://www.bankingnewsai.com/ai-regulation/compare/eu-ai-act-vs-colorado-ai-act): EU AI Act vs Colorado AI Act: AI in Credit Decisions

## Related documents

- [SB 26-189](https://www.bankingnewsai.com/ai-regulation/documents/co-sb26-189) — Automated Decision-Making Technology Act (repeal and reenactment of the Colorado AI Act) (May 14, 2026)
- [Colorado AG proposed ADMT rules](https://www.bankingnewsai.com/ai-regulation/documents/co-ag-admt-proposed-rules-2026) — Proposed Automated Decision-Making Technology and Conversational AI Service Rules (Notice of Rulemaking Hearing) (Aug 11, 2026)
- [HB 26-1263](https://www.bankingnewsai.com/ai-regulation/documents/co-hb26-1263) — Conversational Artificial Intelligence Service Operator Requirements (Chatbot Safety Act) (May 29, 2026)
- [SB 25B-004](https://www.bankingnewsai.com/ai-regulation/documents/co-sb25b-004) — Artificial Intelligence Consumer Protections — delay of effective date to June 30, 2026 (Aug 28, 2025)
- [Colorado SB 21-169 and Regulation 10-1-1](https://www.bankingnewsai.com/ai-regulation/documents/co-sb21-169) — Protecting Consumers from Unfair Discrimination in Insurance Practices (SB21-169, C.R.S. § 10-3-1104.9) and Colorado Insurance Regulation 10-1-1 (3 CCR 702-10) (Jul 6, 2021)
- [Regulation (EU) 2026/1744 (Digital Omnibus on AI)](https://www.bankingnewsai.com/ai-regulation/documents/eu-digital-omnibus-ai-regulation-2026-1744) — Regulation (EU) 2026/1744 amending Regulation (EU) 2024/1689 as regards the simplification of the implementation of harmonised rules on artificial intelligence (Digital Omnibus on AI) (Jul 24, 2026)
- [RBI draft Guidance on Regulatory Principles for Model Risk Management](https://www.bankingnewsai.com/ai-regulation/documents/rbi-model-risk-management-guidance-2026) — Guidance on Regulatory Principles for Model Risk Management, 2026 (draft released for public comments) (Jun 24, 2026)
- [Draft Commission guidelines on high-risk classification](https://www.bankingnewsai.com/ai-regulation/documents/eu-commission-draft-guidelines-high-risk-classification-2026) — Draft Commission Guidelines on the classification of high-risk AI systems under Article 6 of the AI Act (May 19, 2026)

Last reviewed Aug 26, 2026. Cite the official text (https://leg.colorado.gov/bills/sb24-205) for the rule and this page for the summary and dates.

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