Massachusetts has no AI-specific statute for banks; the Attorney General regulates AI through existing law. An April 16, 2024 advisory states that the Consumer Protection Act (G.L. c. 93A, §2), the Anti-Discrimination Law (G.L. c. 151B, §4) and the data security law (G.L. c. 93H) apply to AI developers, suppliers and users, and a July 10, 2025 assurance of discontinuance with Earnest Operations LLC put that into practice: $2.5 million and a mandated AI governance, fair-lending testing and model-inventory program for a student-loan lender's underwriting models. For banks and lenders the working lesson is that a model's disparate impact, an inaccurate adverse-action notice or an unvalidated 'bias-free' claim can each be charged as an unfair or deceptive practice under c. 93A.
| Full name | Massachusetts — Office of the Attorney General (Consumer Protection Division; Consumer Protection Act G.L. c. 93A, Anti-Discrimination Law G.L. c. 151B, data security law G.L. c. 93H) |
| Role | State attorney general applying existing consumer-protection, anti-discrimination and data-security law to AI, and the author of an AI fair-lending settlement with a student-loan lender |
| Force on banks | Binding law |
| Applies to | Developers, suppliers and users of AI and algorithmic decision-making systems that deal with Massachusetts consumers, including banks, credit unions, fintech lenders and their vendors. The AG's April 2024 advisory creates no new rules; the statutes it restates are binding. How those statutes apply to federally chartered institutions is a separate preemption question the advisory does not address |
| Key document | Attorney General Advisory on the Application of the Commonwealth's Consumer Protection, Civil Rights, and Data Privacy Laws to Artificial Intelligence (April 16, 2024), and the Earnest Operations LLC Assurance of Discontinuance ($2.5 million; announced July 10, 2025) |
| Latest move | July 10, 2025: Attorney General Andrea Joy Campbell announced a $2.5 million settlement with Earnest Operations LLC over AI underwriting models, with mandated AI governance, annual fair-lending testing and reporting to the Attorney General |
| Documents tracked | 2 · all documents → |
The Attorney General's position is built on three statutes rather than new rules. Chapter 93A, §2 and the Attorney General's regulations at 940 CMR 3.00 and 5.00 are read to cover false advertising of AI, supplying a defective AI system, misrepresenting an AI system's reliability (including untested claims that it is free from bias or compliant with law), breach of warranty and deepfake or voice-cloning fraud. Chapter 151B, §4 is read to bar algorithmic decision-making that relies on discriminatory inputs or produces discriminatory results. Chapter 93H and 201 CMR 17.00 require safeguards for the personal information AI systems use, and the advisory notes that the Attorney General may also enforce certain federal laws, including the Equal Credit Opportunity Act's adverse-action notice requirement.
The Earnest Operations settlement is the enforcement counterpart. The assurance of discontinuance, filed under G.L. c. 93A, §§2 and 5, alleges that Earnest failed to test its underwriting models for disparate impact, used a Cohort Default Rate variable that penalized Black and Hispanic applicants, automatically denied applicants without a green card, and sent inaccurate adverse-action notices; Earnest denies the allegations and admitted nothing. Its injunctive terms (written AI governance, an algorithmic oversight team, annual fair-lending testing of models and knockout rules, annual model inventories, four-year decision records, interpretable models and validated decline reasons, and compliance reporting to the Attorney General) read like a model risk management program with fair lending built in, and are the clearest published statement of what this Attorney General expects from a lender using AI.
What has the Massachusetts AG actually published on AI?
| Date | Document | Status |
|---|---|---|
| Jul 10, 2025 | Massachusetts AG Earnest Operations settlement (July 2025) — Assurance of Discontinuance: In the matter of Earnest Operations LLC (Massachusetts Attorney General, announced July 10, 2025) | In force |
| Apr 16, 2024 | Massachusetts AG AI Advisory (April 2024) — Attorney General Advisory on the Application of the Commonwealth's Consumer Protection, Civil Rights, and Data Privacy Laws to Artificial Intelligence | In force |
| Date | Type | Document / event |
|---|---|---|
| Jul 10, 2025 | Enforcement | Massachusetts AG Earnest Operations settlement (July 2025) — Assurance of Discontinuance: In the matter of Earnest Operations LLC (Massachusetts Attorney General, announced July 10, 2025). On July 10, 2025 Massachusetts Attorney General Andrea Joy Campbell announced a $2.5 million settlement with Earnest Operations LLC, a Delaware-based student-loan lender, over its AI-driven underwriting. source ↗ |
| Apr 16, 2024 | Guidance | Massachusetts AG AI Advisory (April 2024) — Attorney General Advisory on the Application of the Commonwealth's Consumer Protection, Civil Rights, and Data Privacy Laws to Artificial Intelligence. The Massachusetts Attorney General's advisory on AI, issued April 16, 2024, states that AI developers, suppliers and users must comply with the Consumer Protection Act (G.L. source ↗ |
- Earnest's compliance reporting under the assurance of discontinuance: a self-review within 180 days of the effective date (the date the AOD is filed in court), corrective action within 90 days after that, a written report to the Attorney General within 60 days after that, then annual reports for three years
- Whether the Attorney General amends or expands the April 2024 advisory; footnote 7 of the advisory says the office anticipates doing so as AI systems and the governing laws evolve
- Further Consumer Protection Division actions against lenders on algorithmic underwriting, adverse-action notices or untested bias claims, using the c. 93A and ECOA theories pleaded in the Earnest AOD
- How Massachusetts enforcement interacts with federal fair-lending priorities, given the Earnest AOD rests on disparate-impact allegations under ECOA and Regulation B
Does Massachusetts have an AI law for banks?
Not an AI-specific one. The Attorney General's April 2024 advisory says the Consumer Protection Act (G.L. c. 93A), the Anti-Discrimination Law (G.L. c. 151B) and the data security law (G.L. c. 93H) already apply to AI. Enforcement runs through those statutes, as in the 2025 Earnest Operations settlement.
What did the Massachusetts AG's Earnest settlement involve?
On July 10, 2025 the Attorney General announced a $2.5 million assurance of discontinuance with student-loan lender Earnest Operations LLC. It alleged inadequate disparate-impact testing of AI underwriting models, a Cohort Default Rate variable with disparate impact, an immigration-status knockout rule and inaccurate adverse-action notices. Earnest denies the allegations.
Is the Massachusetts AG's AI advisory binding?
The advisory itself imposes no new obligations and says it does not address every applicable law. The statutes and regulations it describes are binding, and the Attorney General has said her office intends to enforce them against AI.
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