I 

118TH CONGRESS 

1ST SESSION H. R. 1266 

To require the Secretary of Veterans Affairs to carry out a pilot program 

on using alternative credit scoring information for veterans and members 

of the Armed Forces, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 28, 2023 

Mr. TIMMONS (for himself and Mr. LEVIN) introduced the following bill; which 

was referred to the Committee on Veterans’ Affairs 

A BILL 

To require the Secretary of Veterans Affairs to carry out 

a pilot program on using alternative credit scoring information for veterans and members of the Armed Forces, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Building Credit Access 

5 for Veterans Act of 2023’’. 


kjohnson on DSK79L0C42PROD with BILLS
2 

•HR 1266 IH

1 SEC. 2. DEPARTMENT OF VETERANS AFFAIRS PILOT PRO2 GRAM ON USE OF ALTERNATIVE CREDIT 

3 SCORING INFORMATION OR CREDIT SCORING 

4 MODELS. 

5 (a) PILOT PROGRAM REQUIRED.— 

6 (1) IN GENERAL.—Not later than one year 

7 after the date of the enactment of this Act, the Sec8 retary of Veterans Affairs shall commence carrying 

9 out a pilot program that will assess the feasibility 

10 and advisability of— 

11 (A) using alternative credit scoring infor12 mation or credit scoring models using alter13 native credit scoring methodology for an indi14 vidual described in paragraph (2)— 

15 (i) to improve the determination of 

16 creditworthiness of such an individual; and 

17 (ii) to increase the number of such in18 dividuals who are able to obtain a loan 

19 guaranteed or insured under chapter 37 of 

20 title 38, United States Code; and 

21 (B) in consultation with such entities as 

22 the Secretary considers appropriate, estab23 lishing criteria for acceptable commercially 

24 available credit scoring models to be used by 

25 lenders for the purpose of guaranteeing or inVerDate Sep 11 2014 00:18 Mar 15, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1266.IH H1266

kjohnson on DSK79L0C42PROD with BILLS
3 

•HR 1266 IH

1 suring a loan under chapter 37 of title 38, 

2 United States Code. 

3 (2) INDIVIDUAL DESCRIBED.—An individual de4 scribed in this paragraph is a veteran or a member 

5 of the Armed Forces who— 

6 (A) is eligible for a loan under chapter 37 

7 of title 38, United States Code; and 

8 (B) has an insufficient credit history for a 

9 lender or the Secretary to determine the credit10 worthiness of the individual. 

11 (3) ALTERNATIVE CREDIT SCORING INFORMA12 TION.—Alternative credit scoring information de13 scribed in paragraph (1)(A) may include proof of 

14 rent, utility, and insurance payment histories, and 

15 such other information as the Secretary considers 

16 appropriate. 

17 (b) VOLUNTARY PARTICIPATION.— 

18 (1) IN GENERAL.—The Secretary shall ensure 

19 that any participation in the pilot program is vol20 untary on an opt-in basis for a lender, a borrower, 

21 and an individual described in subsection (a)(2). 

22 (2) NOTICE OF PARTICIPATION.—Subject to 

23 paragraph (3), any lender who participates in the 

24 pilot program shall— 


kjohnson on DSK79L0C42PROD with BILLS
4 

•HR 1266 IH

1 (A) notify each individual described in sub2 section (a)(2) who, during the pilot program, 

3 applies for a loan under chapter 37 of title 38, 

4 United States Code, from such lender, of the 

5 lender’s participation in the pilot program; and 

6 (B) offer such individual the opportunity 

7 to participate in the pilot program. 

8 (3) LIMITATION.— 

9 (A) IN GENERAL.—The Secretary may es10 tablish a limitation on the number of individ11 uals and lenders that may participate in the 

12 pilot program. 

13 (B) REPORT.—If the Secretary limits par14 ticipation in the pilot program under subpara15 graph (A), the Secretary shall, not later than 

16 15 days after establishing such limitation, sub17 mit to Congress a report setting forth the rea18 sons for establishing such limitation. 

19 (c) APPROVAL OF CREDIT SCORING MODELS.— 

20 (1) IN GENERAL.—A lender participating in the 

21 pilot program may not use a credit scoring model 

22 under subsection (a)(1)(A) until the Secretary has 

23 reviewed and approved such credit scoring model for 

24 purposes of the pilot program. 


kjohnson on DSK79L0C42PROD with BILLS
5 

•HR 1266 IH

1 (2) PUBLICATION OF CRITERIA.—The Secretary 

2 shall publish in the Federal Register any criteria es3 tablished under subsection (a)(1)(B) for acceptable 

4 commercially available credit scoring models that use 

5 alternative credit scoring information described in 

6 subsection (a)(1)(A) to be used for purposes of the 

7 pilot program. 

8 (3) CONSIDERATIONS; APPROVAL OF CERTAIN

9 MODELS.—In selecting credit scoring models to ap10 prove under this section, the Secretary shall— 

11 (A) consider the criteria for credit score 

12 assessments under section 1254.7 of title 12, 

13 Code of Federal Regulations; and 

14 (B) approve any commercially available 

15 credit scoring model that has been approved 

16 pursuant to section 302(b)(7) of the Federal 

17 National Mortgage Association Charter Act (12 

18 U.S.C. 1717(b)(7)) or section 305(d) of the 

19 Federal Home Loan Mortgage Corporation Act 

20 (12 U.S.C. 1454(d)). 

21 (d) OUTREACH.—To the extent practicable, the Sec22 retary shall conduct outreach to lenders and individuals 

23 described in subsection (a)(2) to inform such persons of 

24 the pilot program. 

25 (e) REPORT.— 


kjohnson on DSK79L0C42PROD with BILLS
6 

•HR 1266 IH

1 (1) IN GENERAL.—Not later than two years 

2 after the date of the enactment of this Act, the Sec3 retary shall submit to Congress a report on the pilot 

4 program. 

5 (2) CONTENTS.—The report submitted under 

6 paragraph (1) shall include the following: 

7 (A) The findings of the Secretary with re8 spect to the feasibility and advisability of using 

9 alternative credit scoring information or credit 

10 scoring models using alternative credit scoring 

11 methodology for individuals described in sub12 section (a)(2). 

13 (B) A description of the efforts of the Sec14 retary to assess the feasibility and advisability 

15 of using alternative credit scoring information 

16 or credit scoring models as described in sub17 paragraph (A). 

18 (C) To the extent practicable, the fol19 lowing: 

20 (i) The rate of participation in the 

21 pilot program. 

22 (ii) An assessment of whether partici23 pants in the pilot program benefitted from 

24 such participation. 


kjohnson on DSK79L0C42PROD with BILLS
7 

•HR 1266 IH

1 (D) An assessment of the effect of the 

2 pilot program on the subsidy rate for loans 

3 guaranteed or insured by the Secretary under 

4 chapter 37 of title 38, United States Code. 

5 (E) Such other information as the Sec6 retary considers appropriate. 

7 (f) TERMINATION.— 

8 (1) IN GENERAL.—The Secretary shall complete 

9 the pilot program required by subsection (a)(1) not 

10 later than September 30, 2026. 

11 (2) EFFECT ON LOANS AND APPLICATIONS.— 

12 The termination of the pilot program under para13 graph (1) shall not affect a loan guaranteed, or for 

14 which loan applications have been received by a par15 ticipating lender, on or before the date of the com16 pletion of the pilot program. 

17 (g) INSUFFICIENT CREDIT HISTORY DEFINED.—In 

18 this section, the term ‘‘insufficient credit history’’, with 

19 respect to an individual described in subsection (a)(2), 

20 means that the individual does not have a credit record 

21 with one of the national credit reporting agencies or such 

22 credit record contains insufficient credit information to as23 sess creditworthiness. 

Æ 


kjohnson on DSK79L0C42PROD with BILLS