NAFCU asks FHFA to reconsider credit score model rule
NAFCU’s Ann Kossachev, commenting on the Federal Housing Finance Agency’s (FHFA) proposal on how it plans to evaluate new credit scoring models for use by the government-sponsored enterprises (GSEs), urged the agency to re-propose the rule so that it doesn’t prevent VantageScore and other model developers from submitting credit score models for consideration. NAFCU opposes the proposed rule because of these concerns.
Kossachev, NAFCU’s director of regulatory affairs, said the association is supportive of the FHFA’s proposed structure for the validation and approval of credit score models. However, she argued that by re-proposing the rule, the FHFA could “provide a more inclusive, fair process that has the potential to enhance the operations of the GSEs and encourage providers of credit score models to innovate, cut costs, and help more creditworthy consumers access the financing they need.”
By excluding models from certain developers in this current rulemaking, Kossachev said the FHFA is limiting competition – which seems contrary to Congress’ intent of the law – “based on poorly reasoned concerns about price fixing.”
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