The Federal Housing Finance Agency should make public the analyses behind its final rule to replace the FICO credit score model used by Fannie Mae and Freddie Mac with the FICO 10T and the VantageScore 4.0 credit score models, as well as analyses behind the decision to transition from requiring three credit reports to two for single-family loans, the American Bankers Association and seven financial and housing industry associations said in a letter this week to the agency.
ABA had previously raised concerns with FHFA about the public comment process for the initial rule, first proposed in 2022, arguing the agency needed to provide “sufficient time and an adaptable structure” to consider and incorporate stakeholder feedback. The agency released the final rule in August. In a Dec. 20 letter, ABA and the other associations asked that as the first step of the implementation process, FHFA provide its analysis behind the rule as well as the data and findings from Fannie Mae’s and Freddie Mac’s comprehensive testing and assessment.
“Transparency into these analyses and assessment findings will greatly enhance and facilitate productive implementation planning discussions in FHFA’s and the enterprises’ ongoing public engagement sessions,” the groups said. “Moreover, transparency in the analysis of the proposed new scoring models will be critical to ensuring a smooth transition in the global fixed-income and credit risk transfer markets where credit scores are disclosed and considered in prepayment and loan performance analysis.”
