Year: 2026
Type: article
Abstract: Automated credit scoring now structures access to consumer finance. Yet governance has centred on explainability and human oversight, often assuming that procedural transparency can secure substantive fairness. This article develops a banking-law account of how explainability and oversight can backfire when compliance is monitored through auditable artefacts rather than outcomes, yielding legible injustice: decisions that are reviewable on paper yet systematically exclusionary in effect. Using the EU model alongside US fair-lending law and the UK Consumer Duty as comparative points, it reconstructs explainability and intervention duties across borrower, governance, and supervisory audiences. The article identifies three incentive-driven mechanisms: proxy concentration, where interpretability pressures channel models toward legally familiar but socially stratified variables; defensive rationing, where accuracy-interpretability trade-offs and asymmetric liability exposure tighten credit thresholds for marginal and non-standard applicants; and review theatre, where human-in-the-loop requirements harden into workflow rituals that document responsibility without preserving real discretion. The article proposes a six-element standard for meaningful intervention: competence, authority, independence, informational sufficiency, evidential engagement and auditable records. The standard distinguishes genuine review from perfunctory click-through approval. It argues for a right of contestability, operationalised through decision-salient notice, low-friction challenge channels and credible escalation paths. It outlines outcome-facing supervision based on distributional dashboards, proxy-use diagnostics and intervention-effectiveness metrics. In that model, transparency becomes a tool for corrective enforcement rather than a device for legitimating automated lending.
Language: English
Subfield: Law
Field: Social Sciences
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $1,180
OpenAlex ID: W7204665279