Us Congress 2023-2024 Regular Session

Us Congress House Bill HB123 Compare Versions

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Old	New	Differences
1	1	I
2	2	118THCONGRESS
3	3	1
4	4	STSESSION H. R. 123
5	5	To authorize a pilot program under section 258 of the National Housing
6	6	Act to establish an automated process for providing additional credit
7	7	rating information for mortgagors and prospective mortgagors under
8	8	certain mortgages.
9	9	IN THE HOUSE OF REPRESENTATIVES
10	10	JANUARY9, 2023
11	11	Mr. G
12	12	REENof Texas introduced the following bill; which was referred to the
13	13	Committee on Financial Services
14	14	A BILL
15	15	To authorize a pilot program under section 258 of the Na-
16	16	tional Housing Act to establish an automated process
17	17	for providing additional credit rating information for
18	18	mortgagors and prospective mortgagors under certain
19	19	mortgages.
20	20	Be it enacted by the Senate and House of Representa-1
21	21	tives of the United States of America in Congress assembled, 2
22	22	SECTION 1. SHORT TITLE. 3
23	23	This Act may be cited as the ‘‘Alternative Data for 4
24	24	Additional Credit FHA Pilot Program Reauthorization 5
25	25	Act’’. 6
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28	28	•HR 123 IH
29	29	SEC. 2. PILOT PROGRAM FOR BORROWERS WITHOUT SUF-1
30	30	FICIENT CREDIT HISTORY. 2
31	31	Section 258 of the National Housing Act (12 U.S.C. 3
32	32	1715z–24) is amended— 4
33	33	(1) in subsection (a)— 5
34	34	(A) by striking ‘‘carry out’’ and inserting 6
35	35	‘‘establish and carry out’’; 7
36	36	(B) by striking ‘‘establish, and’’; 8
37	37	(C) by inserting ‘‘who elect to participate 9
38	38	in the pilot program’’ before the second comma; 10
39	39	(D) by striking ‘‘mortgagors and’’; 11
40	40	(E) by inserting after ‘‘their creditworthi-12
41	41	ness’’ the following: ‘‘and have opted into the 13
42	42	use of additional credit information’’; and 14
43	43	(F) by striking ‘‘alternative’’ each place 15
44	44	such term appears and inserting ‘‘additional’’; 16
45	45	(2) in subsection (b), by adding after the period 17
46	46	at the end the following: ‘‘The pilot program may 18
47	47	not be carried out with respect to any mortgagor or 19
48	48	prospective mortgagor under a mortgage the pro-20
49	49	ceeds of which are used to prepay or pay off an ex-21
50	50	isting loan secured by the same property.’’; 22
51	51	(3) by striking subsection (c); 23
52	52	(4) by redesignating subsections (b) (as amend-24
53	53	ed by paragraph (2) of this subsection) and (d) as 25
54	54	subsections (c) and (k), respectively; 26
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57	57	•HR 123 IH
58	58	(5) by inserting after subsection (a) the fol-1
59	59	lowing new subsection: 2
60	60	‘‘(b) G
61	61	OAL.—The goal of the pilot program under 3
62	62	this section shall be to examine and evaluate the benefits 4
63	63	of using such a credit scoring model that uses additional 5
64	64	data.’’; 6
65	65	(6) by inserting after subsection (c) (as so re-7
66	66	designated by paragraph (4) of this subsection) the 8
67	67	following: 9
68	68	‘‘(d) A
69	69	DDITIONALCREDITINFORMATION.—The Sec-10
70	70	retary shall, after consultation with the Government Na-11
71	71	tional Mortgage Association and not later than one year 12
72	72	after the date of the enactment of this subsection, select 13
73	73	one or more commercially available credit scoring models 14
74	74	that will be available under the pilot and that utilize addi-15
75	75	tional data, as the Secretary considers appropriate based 16
76	76	on the goals of the pilot program. In selecting the model 17
77	77	or models to use, the Secretary shall consider the criteria 18
78	78	under part 1254 of the regulations of the Director of the 19
79	79	Federal Housing Finance Agency (12 C.F.R. Part 1254) 20
80	80	to the extent appropriate. 21
81	81	‘‘(e) N
82	82	OTIFICATION.— 22
83	83	‘‘(1) N
84	84	OTICE OF OPTIONS.—The Secretary shall 23
85	85	develop a notice for prospective mortgagors, and re-24
86	86	quire mortgagees to provide such notice to prospec-25
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89	89	•HR 123 IH
90	90	tive mortgagors, that informs prospective mortga-1
91	91	gors of— 2
92	92	‘‘(A) the ability to opt into the use of the 3
93	93	credit scoring model selected for use under the 4
94	94	pilot program; 5
95	95	‘‘(B) information on how the pilot program 6
96	96	credit scoring model differs from the FHA’s 7
97	97	current credit scoring models, including the 8
98	98	types of additional data that are included in the 9
99	99	pilot program model; and 10
100	100	‘‘(C) housing counseling agencies in the 11
101	101	area that are approved by the Department of 12
102	102	Housing and Urban Development. 13
103	103	‘‘(2) C
104	104	OMPARISON OF LENDING OPTIONS .—The 14
105	105	Secretary shall require mortgagees participating in 15
106	106	the pilot program to provide information to prospec-16
107	107	tive mortgagors sufficient to allow comparison of the 17
108	108	mortgagor’s lending options using the credit scoring 18
109	109	model under the pilot program and using the credit 19
110	110	scoring model then in effect for mortgagors not opt-20
111	111	ing into the use of the credit scoring model under 21
112	112	the pilot program. 22
113	113	‘‘(f) U
114	114	NDERWRITING OPTIONS.—This section may 23
115	115	not be construed to preclude a prospective mortgagor who 24
116	116	opts to use an approved credit scoring model under the 25
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119	119	•HR 123 IH
120	120	pilot program under this subsection in connection with un-1
121	121	derwriting for a mortgage insured under this title from 2
122	122	thereafter obtaining a determination of creditworthiness 3
123	123	involved in underwriting for such mortgage using informa-4
124	124	tion other than that provided under such approved credit 5
125	125	scoring model. 6
126	126	‘‘(g) P
127	127	ROTECTION OF PROPRIETARY INFORMA-7
128	128	TION.—This section may not be construed to require the 8
129	129	disclosure or sharing of any proprietary information. 9
130	130	‘‘(h) R
131	131	EPORTING.— 10
132	132	‘‘(1) I
133	133	N GENERAL.—The Secretary shall submit 11
134	134	reports to the Congress in accordance with para-12
135	135	graph (2) that provide a detailed evaluation of the 13
136	136	effectiveness of the pilot, including data that 14
137	137	shows— 15
138	138	‘‘(A) the number of mortgagors who had 16
139	139	the option to opt into using additional credit in-17
140	140	formation and the number of mortgagors who 18
141	141	opted into using additional credit information; 19
142	142	‘‘(B) the total number and percent of 20
143	143	mortgagors who opted into the pilot and were 21
144	144	subsequently approved for a mortgage; 22
145	145	‘‘(C) demographic information about mort-23
146	146	gagors who opt into using additional credit in-24
147	147	formation, compared to demographic informa-25
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150	150	•HR 123 IH
151	151	tion about mortgagors generally, which shall in-1
152	152	clude race, ethnicity, marital status, sex or gen-2
153	153	der, geographic location regarding mortgaged 3
154	154	properties, and any other information the Sec-4
155	155	retary deems appropriate; 5
156	156	‘‘(D) whether or not mortgagors with no or 6
157	157	thin credit files benefitted from having this op-7
158	158	tion and how; 8
159	159	‘‘(E) whether or not other borrowers who 9
160	160	did not have thin or no credit files benefitted 10
161	161	from this option and how; 11
162	162	‘‘(F) the effectiveness of the additional 12
163	163	credit information in predicting mortgage loan 13
164	164	default; 14
165	165	‘‘(G) the rate of participation of mortga-15
166	166	gees in the pilot program; 16
167	167	‘‘(H) whether or not the pilot program had 17
168	168	an impact on the Mutual Mortgage Insurance 18
169	169	Fund, in general, and specifically whether it 19
170	170	had an impact on the economic net worth ratio 20
171	171	of the Fund; 21
172	172	‘‘(I) whether or not there was sufficient in-22
173	173	come from the pilot program to offset the risk 23
174	174	posed to such Fund by the pilot program; 24
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177	177	•HR 123 IH
178	178	‘‘(J) whether the pilot program had an im-1
179	179	pact on the ability of other borrowers not par-2
180	180	ticipating in the program to obtain the products 3
181	181	and services of the FHA; and 4
182	182	‘‘(K) any other information the Secretary 5
183	183	determines relevant. 6
184	184	‘‘(2) S
185	185	UBMISSION.—The Secretary shall submit 7
186	186	a report described in paragraph (1)— 8
187	187	‘‘(A) not later than 6 months after the 9
188	188	conclusion of the 2-year period beginning on the 10
189	189	date on which the Secretary begins accepting 11
190	190	the additional credit scores through the pilot 12
191	191	program established by the Secretary pursuant 13
192	192	to this section; and 14
193	193	‘‘(B) not later than 1 year after the con-15
194	194	clusion of the 5-year period beginning on the 16
195	195	date of the enactment of the Alternative Data 17
196	196	for Additional Credit FHA Pilot Program Re-18
197	197	authorization Act. 19
198	198	‘‘(3) R
199	199	EPORT ON SELECTION OF ADDITIONAL 20
200	200	CREDIT MODEL.—Not later than the conclusion of 21
201	201	the 6-month period that begins upon the conclusion 22
202	202	of the 1-year period under subsection (d), the Sec-23
203	203	retary shall submit to the Congress a report explain-24
204	204	ing why the additional credit scoring model or mod-25
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207	207	•HR 123 IH
208	208	els selected pursuant to subsection (d) were selected 1
209	209	in lieu of other commercially available credit scoring 2
210	210	models. 3
211	211	‘‘(4) P
212	212	UBLIC AVAILABILITY OF INFORMATION .— 4
213	213	The Secretary shall make publicly available in an 5
214	214	easily accessible location on the website of the De-6
215	215	partment— 7
216	216	‘‘(A) each report submitted to the Con-8
217	217	gress pursuant to this subsection; and 9
218	218	‘‘(B) information about the pilot program, 10
219	219	which shall include an up-to-date listing of 11
220	220	mortgagees participating in the pilot program. 12
221	221	‘‘(i) A
222	222	UTHORITYTOLIMITPARTICIPATION.—The 13
223	223	Secretary may establish a limitation to cap participation 14
224	224	in the pilot program under this section. 15
225	225	‘‘(j) A
226	226	UTHORIZATION OF APPROPRIATIONS.—There 16
227	227	is authorized to be appropriated— 17
228	228	‘‘(1) $3,000,000 for fiscal year 2023 for estab-18
229	229	lishing and carrying out the pilot program under 19
230	230	this section; and 20
231	231	‘‘(2) $1,500,000 for each of fiscal years 2024 21
232	232	through 2027 for carrying out the pilot program 22
233	233	under this section.’’; and 23
234	234	(7) in subsection (k), as so redesignated by 24
235	235	paragraph (4), by striking ‘‘5-year period beginning 25
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238	238	•HR 123 IH
239	239	on the date of the enactment of the Building Amer-1
240	240	ican Homeownership Act of 2008’’ and inserting ‘‘5- 2
241	241	year period beginning on the date of the enactment 3
242	242	of the Alternative Data for Additional Credit FHA 4
243	243	Pilot Program Reauthorization Act’’. 5
244	244	Æ
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