[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8485 Introduced in House (IH)]
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117th CONGRESS
2d Session
H. R. 8485
To amend the Equal Credit Opportunity Act to require creditors to
consider certain additional credit information when making mortgage
loans, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 22, 2022
Ms. Williams of Georgia introduced the following bill; which was
referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the Equal Credit Opportunity Act to require creditors to
consider certain additional credit information when making mortgage
loans, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Expanding Access to Credit through
Consumer-Permissioned Data Act''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) Using alternative data in mortgage lending (either
through alternative credit scores or in underwriting) has the
potential to increase access to credit for individuals with
little or no credit history with the national credit reporting
agencies (NCRAs), according to a review of alternative data use
in mortgage lending by the Government Accountability Office in
December 2021.
(2) Approximately 45 million consumers do not have any
credit history with the NCRAs or did not have enough credit
history to be scored, according to a 2015 report by the Bureau
of Consumer Financial Protection (CFPB), entitled ``Data Point:
Credit Invisibles''. The CFPB also reported that this
population disproportionately included low-income consumers,
younger consumers, and consumers of color.
(3) The use of alternative data to establish a low- or
moderate-income borrower's credit history for the purpose of
extending mortgage credit can help lenders meet goals of the
Community Reinvestment Act.
(4) Mortgage underwriting systems that allow lenders to use
consumer-permissioned alternative credit information may help
expand access to mortgages for borrowers with lower credit
scores and communities of color. On September 21, 2021, Fannie
Mae updated its automated underwriting system so that it
notifies lenders that a borrower may benefit from the inclusion
of consistent rental payment information, and with the
consumer's permission, the underwriting system will
automatically identify rental payments within bank statement
data and include this in its credit assessment. According to a
fair lending and credit risk analysis by Fannie Mae and the
Federal Housing Finance Agency, the populations most likely to
benefit from this change are applicants with lower credit
scores, who are disproportionately consumers of color.
SEC. 3. REQUIREMENT TO CONSIDER ADDITIONAL CREDIT INFORMATION WHEN
MAKING MORTGAGE LOANS.
(a) In General.--The Equal Credit Opportunity Act (15 U.S.C. 1691
et seq.) is amended by inserting after section 701 the following:
``Sec. 701A. Requirement to consider additional credit information when
making mortgage loans
``(a) In General.--A creditor extending a mortgage loan shall, in
evaluating the creditworthiness of an applicant, consider credit
information not reported through a consumer reporting agency, if--
``(1) the applicant--
``(A) requests such consideration;
``(B) authorizes the provision of the credit
information to be considered; and
``(C) states that the applicant does not believe
that credit information reported through consumer
reporting agencies fully or accurately reflects the
applicant's creditworthiness in the absence of such
information; and
``(2) the credit information relates to the types of
information that the creditor would consider if otherwise
reported and includes current payment and transaction
information, such as bank statement information or rental
payment information.
``(b) Treatment of Additional Information.--A creditor shall treat
any information provided pursuant to subsection (a) in the same manner
and with the same weight as the creditor would treat the same
information if it were provided by a consumer reporting agency, as
defined through regulations by the Director of the Bureau of Consumer
Financial Protection, unless the creditor reasonably determines that
the information is the result of a material misrepresentation,
according to regulations provided by the Director of the Bureau.
``(c) Notice to Applicants.--
``(1) In general.--A creditor described under subsection
(a) shall provide each applicant for a mortgage loan with a
notice that includes--
``(A) an explanation of the applicant's right under
this section to authorize the provision of additional
credit information to the creditor for consideration,
including examples of such additional information, as
well as the benefits of providing such information; and
``(B) the right of the creditor to disregard any
such information if the creditor determines, according
to regulations provided by the Director of the Bureau,
that the information is the result of a material
misrepresentation.
``(2) Notice languages.--Notices required under paragraph
(1) shall be made available in each of the 8 languages most
commonly spoken by individuals with limited English
proficiency, as determined by the Director of the Bureau using
information published by the Director of the Bureau of the
Census.
``(3) Form language.--The Director of the Bureau shall
establish form language, which shall be used by each creditor
when providing the notices required under this subsection,
providing--
``(A) the examples described under paragraph
(1)(A);
``(B) the description of the benefits described
under paragraph (1)(A); and
``(C) the non-English language versions of the
notices described under paragraph (2).
``(d) Consideration of Alternative Data.--A creditor shall ensure
that the alternative data provided under the requirements of subsection
(a) shall be considered as part of the decisioning process.
``(e) Treatment of Underwriting Systems.--
``(1) In general.--Any person, including any Federal agency
that insures, guarantees, supplements, or assists a Federally
backed single-family or multifamily mortgage loan, who develops
or maintains an underwriting system for mortgage loans shall
ensure such system complies with the requirements described
under subsection (a).
``(2) Rulemaking.--The Director of the Bureau (in
consultation with the Director of the Federal Housing Finance
Agency, the Secretary of Housing and Urban Development, and any
other Federal agency that insures, guarantees, supplements, or
assists a Federally backed single-family or multifamily
mortgage loan) may issue such regulations as, in the judgement
of the Director, may be necessary to capture consumer-
permissioned data in automated underwriting systems.
``(f) Consumer Reporting Agency Defined.--In this section, the term
`consumer reporting agency' has the meaning given that term under
section 603 of the Fair Credit Reporting Act.''.
(b) Clerical Amendment.--The table of contents for the Equal Credit
Opportunity Act is amended by inserting after the item relating to
section 701 the following:
``701A. Requirement to consider additional credit information when
making mortgage loans.''.
(c) Rulemaking; Application Date.--Not later than the end of the
18-month period beginning on the date of enactment of this Act, the
Director of the Bureau of Consumer Financial Protection shall issue
final rules to carry out the amendments made by this section, and such
amendments shall apply to creditors on and after the effective date of
such final rules.
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