Sec. 502. Mandates ongoing review and reports to Congress by the Federal Housing Finance Agency on using additional, alternative, and updated credit scoring models as part of the criteria for loans purchased by Fannie Mae and Freddie Mac
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The Director of the Federal Housing Finance Agency, in consultation with the Director of the Bureau of Consumer Financial Protection, shall review the advantages and disadvantages of implementing additional, alternative, or updated credit scoring models (as defined in section 603 of the Fair Credit Reporting Act ( 15 U.S.C. 1681a )) used to establish the eligibility criteria for loans purchased by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
Such review shall analyze— the impact of using such credit scoring models on the accuracy and predictive value of the performance of loans purchased by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation; the ability of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation to more effectively manage credit risks by adopting additional, alternative, or updated credit scoring models; any potential operational risks associated with the reliance on one single provider of credit scores; the availability and affordability of covered residential mortgage loans, as defined in section 605C of the Fair Credit Reporting Act; the interests of taxpayers; and any other factors determined relevant by the Director of the Federal Housing Finance Agency or the Director of the Bureau of Consumer Financial Protection.
The Director of the Federal Housing Finance Agency shall seek public input about the methodology and research design of the review described in subsection (a), including from organizations and experts representing racial and ethnic minority communities and populations, fair lending organizations, civil rights organizations, and consumer and community groups that represent depository institutions and credit unions that primarily serve traditionally underserved communities. Not later than the end of the 18-month period beginning on the date of the enactment of this Act, and every 2 years thereafter, the Director of the Federal Housing Finance Agency shall issue a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate containing all findings and determinations made in carrying out the review required under subsection (a).
If the Director of the Federal Housing Finance Agency determines, in consultation with the Bureau, that the advantages of implementing additional, alternative, or updated credit scoring models outweigh the disadvantages, the Director shall promptly require the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation to revise their seller-servicer guidelines to allow for the use of such additional, alternative, or updated credit scoring models, and any other guidelines as the Director determines appropriate, in a manner consistent with the determination of the Director.
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Sec. 502
Mandates ongoing review and reports to Congress by the Federal Housing Finance Agency on using additional, alternative, and updated credit scoring models as part of the criteria for loans purchased by Fannie Mae and Freddie Mac
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