WASHINGTON—The Federal Housing Finance Agency said it will stop pursuing its credit score initiative in 2018 to focus on implementing the Credit Score Competition Act in the recently enacted,
Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155).
The Credit Score Competition Act (Section 310) of S. 2155 requires the FHFA to create a process for evaluating new credit scoring models for use by government-sponsored enterprises (GSEs) Freddie Mac and Fannie Mae. This process mandates that FHFA develop a proposed rule, receive and evaluate public comments and issue a final rule on how the GSEs will use more than one credit score model.
The effective date of Section 310 is Nov. 20.
Commenting on the agency’s request for input on credit score models in March, NAFCU recommended it provide credit unions with more flexibility, rather than continuing to use a one-size-fits-all approach. The evaluation of new credit scoring models, NAFCU believes, will ultimately help consumers by leading to fairer, more accurate models as competition between these models increases.