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Bethany Sanchez
Take Root Milwaukee
Rule Number:
Federal Register Citation:
83 FR 65575
12 CFR Part 1254


As a member of the Resource and Oversight Committee and the Chair of its Advocacy Workgroup, I am writing on behalf of Take Root Milwaukee. Founded in 2010, Take Root Milwaukee is a consortium of lenders, housing counselors, Realtors, the City of Milwaukee, our state housing finance authority, fair housing professionals, neighborhood organizations, and private philanthropic foundations who collaborate to promote sustainable homeownership and prevent foreclosures in the City of Milwaukee. To ensure maximum housing choice for home-seekers in the City of Milwaukee, we work to ensure that all credit-worthy borrowers have equal access to fairly-priced credit.  Unfortunately, the current credit scoring models used by Fannie Mae and Freddie Mac (the GSEs) unfairly shut out millions of borrowers across the country because they fail to evaluate all factors that can accurately predict a potential borrower’s ability to repay a loan.  

We urge you to implement regulations for the Credit Score Competition provisions contained in Sec. 310 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act) that will effectively allow competition among Credit Scoring Models, to encourage more predictive and precise models to flourish and to expand opportunity in a fair and responsible manner to millions of consumers who are currently unable to get a credit score.

In crafting and approving Sec. 310 (of S. 2155), entitled Credit Score Competition, it was Congress’ intent that FHFA would promulgate rules allowing for competition in the credit scoring models used by lenders for loans to be sold to Fannie Mae and Freddie Mac. This competition is necessary to meet the needs of all borrowers entering the homeownership market now, and those seeking to become homeowners in the future.  The competition will help fairly and responsibly extend credit opportunity to millions of consumers who are boxed out of a credit score when using the traditional scoring model mandated by the GSEs.

Members of Take Root Milwaukee have reviewed studies, and confirmed with our colleagues in nonprofit housing and credit counseling organizations, that there are indeed viable competitors to the FICO Classic credit scoring model, which is the model currently required by Fannie Mae and Freddie Mac to be used for mortgages they purchase from approved lenders. For example, VantageScore has demonstrated that by using their Model 4.0, they can score approximately 40 million people who are currently unable to obtain a score using the Classic FICO scoring model. We recognize that many of these consumers will not be eligible for credit today, but we also know they need to gauge their status for credit counselors or housing counselors to be able to assist them improve their situation to become eligible for mainstream credit. 

The provision in the rule that eliminates any Credit Score Model from consideration of approval if there is any ownership (even fractional) by a Consumer Data Provider must be removed. The anti-trust concerns cited in the proposed rule have already been decided in the courts in favor of the model owned by the three Credit Bureaus (VantageScore). Additionally, please note that the two credit score models have been competing for 12 years in other credit sectors such as credit cards, auto loans, student loans, unsecured loans, etc. with no examples of data access restriction or negative pricing impact. This anti-competition provision results in a perpetuation of the more than 20-year monopoly for FICO mandated by the GSEs in the conventional mortgage markets of America and must be eliminated from consideration to allow competition and innovation in credit scoring models to meet the needs of our constituents now and in the years to come.

As enacted into law Sec. 310 is simple and straightforward; its implementing regulations should be likewise. 


Bethany Sanchez
Member, Take Root Milwaukee Resource and Oversight Committee
Chair, Take Root Milwaukee Advocacy Workgroup

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