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FHFA Announces Decision to Stop Credit Score Initiative

No Decision in 2018; Focus Shifts to Implementing New Law

FOR IMMEDIATE RELEASE
7/23/2018

Washington, D.C. – The Federal Housing Finance Agency (FHFA) today announced that the Agency will not make a decision in 2018 about updating the credit score model used by Fannie Mae and Freddie Mac (the Enterprises) as previously announced and, instead, is shifting its focus to implementation of Section 310 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (Public Law 115-174) enacted in May (the Act).  The Act requires FHFA to define, through rulemaking, the standards and criteria the Enterprises will use to validate credit score models.

FHFA and the Enterprises have been actively evaluating the potential impact of a new credit score model or models on access to credit, safety and soundness, operations in the mortgage finance industry, and competition in the credit score market for some time as part of an ongoing Conservatorship Scorecard Initiative.  Under the Initiative, FHFA had done significant outreach to industry stakeholders, including lenders, mortgage insurers and investors, as well as consumer advocates.  More than 100 stakeholders had responded to a Request for Input (RFI) issued as part of the Scorecard Initiative.  Prior to enactment of Section 310, FHFA had announced that it planned to issue a final decision in 2018.

"After careful evaluation, we have determined that proceeding with efforts to reach a decision based on our Conservatorship Scorecard Initiative process and timetable would be duplicative of, and in some respects inconsistent with, the work we are mandated to do under Section 310 of the Act," said FHFA Director Melvin L. Watt.  "In light of that, we are communicating to Congress that we are transferring our full efforts to working with the Enterprises to implement the steps required under Section 310.  These steps include developing a proposed rule, receiving and evaluating public comment on the proposed rule and issuing a Final Rule to govern the verification of credit score models.  Thereafter, we will follow through on the steps required to implement the new Rule." 

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The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 11 Federal Home Loan Banks. These government-sponsored enterprises provide more than $6.1 trillion in funding for the U.S. mortgage markets and financial institutions. Additional information is available at www.FHFA.gov, on Twitter @FHFA, YouTube and LinkedIn.
Contacts:

Media: Stefanie Johnson (202) 649-3030 / Corinne Russell (202) 649-3032
Consumers: Consumer Communications or (202) 649-3811

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