Fannie Mae and Freddie Mac have published a joint solicitation seeking applications from credit score model developers, FHFA announced today. This marks a crucial first step in the GSEs’ process for evaluating new credit score models, which was mandated by the S. 2155 regulatory reform law.
According to the solicitation, the GSEs will assess each credit score model for accuracy, reliability and integrity. Models that pass the initial credit score assessment will undergo an enterprise business assessment through which Fannie and Freddie will each determine the value, ability, need and effort associated with incorporating the score into its business, systems and operational processes. The GSEs will accept applications for 120 days beginning on May 18, 2020.
As the GSEs contemplate the use of alternative credit scores, ABA urged in previous comments that they ensure that all prospective models are accurate, predictive, reliable and empirically based. ABA continues to urge FHFA to ensure that opening up the process does not lead to additional regulatory or cost burden for lenders by requiring them to adopt more than one credit score model.
