Page 37 - July-August 2018 GSE Report Flip Book

FANNIE MAE AND FREDDIE MAC JJUALN. U- ARUYG. 22001188
FHFA shelves its search for a new credit-scoring model
FHFA extends the comment period for the proposed GSE capital rule
FHFA proposes changes to its golden parachute rule to reduce compliance burdens
REGULATORY WATCH
FHFA shelves its search for a new credit-scoring model
The Federal Housing Finance Agency announced it will delay its decision on a approving a new credit score model and lenders can use the current FICO credit score model until November 20, 2020,
FHFA Director Melvin Watt said:
After careful evaluation, we have determined that proceeding with efforts to reach a decision based on our Conservatorship Scorecard Initiative process and timetable would be duplicative of, and in some respects inconsistent with, the work we are mandated to do under Section 310 of the Act. In light of that, we are communicating to Congress that we are transferring our
full efforts to working with the enterprises to implement the steps required under Section 310.
These steps include developing a proposed rule, receiving and evaluating public comment on the proposed rule and issuing a Final Rule to govern the verification of credit score models. Thereafter, we will follow through on the steps required to implement the new Rule.
VantageScore and FICO expressed disappointment over FHFA’s delay.
After five years of examination and three years of inclusion in its 2018
GSE Scorecard, it is disappointing to learn that FHFA will not meet the deadlines prescribed by Congress to implement a system that will bring
the benefits of competition to the mortgage market,” said VantageScore president and CEO Barrett Burns. “Model validations and an industry comment period have already occurred and therefore FHFA should move ahead more expeditiously. With every day that passes, mortgage applicants
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