FHFA credit score policy implementation revisions urged

The Credit Union National Credit Union National Association (CUNA) has joined other organizations in encouraging the Federal Housing Finance Agency’s (FHFA) revision of its credit scoring framework.

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The CUNA joined other organizations that include the American Bankers Association, the Center for Responsible Lending, the Community Home Lenders of America, the Consumer Bankers Association, and the Credit Union National Association in forwarding correspondence to FHFA Director Sandra Thompson regarding the matter.

“We appreciate the opportunity to provide stakeholder feedback in response to the FHFA announcement on March 23, 2023 of an implementation plan for the adoption of the FICO 10T and VantageScore 4.0 credit score models, as well as the bi-merge credit reporting policy, by Fannie Mae and Freddie Mac – the Enterprises,” the organizations wrote. “Our organizations represent a wide range of housing finance stakeholders and Enterprise counterparties in both the primary and secondary mortgage markets, including lenders, servicers, mortgage insurers, and consumer advocates.”

The organizations said they have a direct interest in the impact of the credit score policy business decisions of the Enterprises and the manner in which the credit score policies contribute to a competitive, equitable and sound housing finance system.

“We recognize FHFA’s intent to recalibrate the credit scoring framework,” the groups wrote. “However, the transition, as outlined, will occur in a multi-stage process that does not adequately address the far-reaching impacts, significant costs, and immense operational complexity of the policy changes. We write to urge FHFA to reformulate the proposed timeline to provide sufficient time and an adaptable structure that will permit stakeholder feedback to be considered and incorporated.”

The organizations maintain a disciplined, orderly transition would minimize housing finance system stability risks.