Do you have to tell borrowers they are talking to AI?

Last reviewed: November 9, 2026. General information, not legal advice. State rules differ and change; confirm how they apply to your tools and your borrowers' states with counsel.

The short answer

There is no single federal rule that requires a label on every AI chat. But several states do require disclosure in specific situations, and letting a borrower believe a bot is a person is risky everywhere. For a licensed mortgage business, the simplest safe practice is to say it is AI at the start of every automated conversation, and say so again whenever someone asks.

That one habit addresses the four state laws below and costs little to set up. The rest of this page shows where the rules come from, where AI is quietly talking to your borrowers, and scripts you can copy.

Utah: disclose when asked, and up front for licensed work

Chapter 77 defines a high-risk interaction to include collecting sensitive personal information, including financial data, and giving personalized financial advice or services. Utah mortgage loan originators are licensed through the Utah Department of Commerce, so an AI assistant that collects income or asset details from Utah borrowers is likely to need the up-front disclosure. See state AI laws that affect mortgage brokers for the Utah details.

Maine: no bot that passes as a person

The law defines an artificial intelligence chatbot as a software application, web interface or computer program that simulates human conversation through text or voice. The Maine Bureau of Consumer Credit Protection flagged this law to its licensees in a September 24, 2025 advisory, the day it took effect.

California: the bot disclosure law

Section 17941(b) says the disclosure must be clear, conspicuous and reasonably designed to inform the people the bot talks with that it is a bot.

Colorado: chatbot rules start January 1, 2027

Colorado's HB 26-1263, signed May 29, 2026, adds duties for operators of a "conversational artificial intelligence service" starting January 1, 2027. It is separate from Colorado's ADMT law for lending decisions, SB 26-189.

The definition also excludes tools used only inside a business, and AI features inside other software that are not designed for emotional companionship. A general-purpose AI assistant offered to the public is more likely to be covered. Ask counsel how your tool fits, and watch the Colorado Attorney General's rules (4 CCR 904-6), which were still in draft at our last review. Adding the disclosure anyway costs little and covers the other states.

Everywhere: deception and calling rules

The FTC Act prohibits unfair or deceptive acts or practices in or affecting commerce (15 U.S.C. 45(a)(1)), and many states have similar laws. A bot that claims to be a person, or claims a loan officer reviewed something they did not, is the kind of statement those laws reach. If your AI places calls or sends texts, the Telephone Consumer Protection Act also applies: the FCC confirmed in 2024 that AI-generated voices are "artificial" voices under the TCPA. See AI voice agents and AI texts to leads.

Where AI may already be talking to your borrowers

• 1. Website chat widget. Often the first place to look. If it answers with AI, label it in the widget header, not only in your privacy policy.
• 2. AI text follow-up on new leads. An AI that texts a lead back in seconds and keeps the conversation going is a chatbot by any of these definitions. Calling and texting rules also apply: see AI voice agents and AI texts to leads.
• 3. AI phone receptionist or voice agent. A voice that answers or places calls for you. Say it is an AI assistant in the first sentence.
• 4. Social media and messaging inbox replies. Auto-replies that hold a conversation in direct messages count too.
• 5. Borrower portal assistant. Many point of sale systems and borrower portals now ship an AI helper. Check whether yours is on and what it tells borrowers.
• 6. Emails drafted by AI and sent by a person. A loan officer who reviews and sends an AI draft is still the one talking. The chatbot rules above target automated conversations, but the content is still yours, so review it before it goes out.

Disclosure scripts you can copy

Replace the bracketed parts before use. Keep the words "AI" and "not a person" in every version; those are what the Utah, Maine and California rules turn on.

Set it up right: eight steps

• 1. List every tool that talks to borrowers. Put each one in your AI use inventory and mark it borrower-facing.
• 2. Turn on a visible label. Use a persistent "AI assistant" label in the chat header and a first message that says it is AI. A persistent label is one of the options Colorado accepts. (C.R.S. 6-1-1708(3)(b))
• 3. Script the "Am I talking to a real person?" answer. The bot must answer yes, it is AI, every time it is asked. Test it with different wordings. (Utah Code 13-77-103(1)(a))
• 4. Give a fast path to a person. Offer "talk to a loan officer" in every conversation and route it to a licensed person.
• 5. Keep the bot away from credit decisions and quotes. Do not let it tell a borrower they are approved or denied, or quote a rate or terms without loan officer review. See the AI marketing fair lending checklist.
• 6. Check the vendor's settings, not just its marketing. Ask whether the AI disclosure can be turned off by staff, whether transcripts are kept and where, and whether the vendor trains on your conversations. Use the AI vendor due diligence questions.
• 7. Keep transcripts with the loan file rules. Chat and text transcripts can hold borrower data. Store them under your record retention and security program.
• 8. Review every quarter. Vendors add AI features often. Recheck the label, the scripts and this page's state list each quarter.

Need a written rule for this? Add an "AI that talks to borrowers" section to your AI policy with the mortgage AI policy template.

Frequently asked questions

Do mortgage brokers have to disclose that a chatbot is AI?

In some states, yes. Utah requires disclosure when a consumer asks and, for licensed occupations, up front in high-risk interactions such as collecting financial data. Maine requires a clear notice when a chatbot could mislead a reasonable consumer into thinking it is human. California prohibits online bots that hide their artificial identity to drive a sale. Disclosing at the start of every automated conversation is the simplest way to cover all of them.

Does Colorado's chatbot law apply to a mortgage website chat?

Colorado HB 26-1263 applies to operators of conversational AI services from January 1, 2027, but its definition excludes tools primarily designed for customer support, customer service and other transactional assistance, and tools used only inside a business. Many mortgage website chat tools may fall in that exclusion. A general-purpose AI assistant offered to the public is more likely to be covered. Ask counsel how your tool fits.

What should a mortgage chatbot say when someone asks if it is a person?

It should say clearly that it is an AI assistant and not a person, and offer to connect the borrower with a licensed loan officer. Utah Code 13-77-103(1)(a) requires that disclosure when a consumer asks.

Is an AI-drafted email that a loan officer sends a chatbot?

Generally no. The chatbot rules target automated conversations. When a loan officer reviews and sends an AI draft, the loan officer is communicating, and is responsible for the content.

Do these rules apply to AI phone calls?

The state chatbot laws cover voice as well as text in several cases, and outbound AI voice calls are also covered by the Telephone Consumer Protection Act. The FCC confirmed in February 2024 that AI-generated voices are artificial voices under the TCPA, so those calls need prior consent.