IB 

Union Calendar No. 248 

116TH CONGRESS 

1ST SESSION H. R. 3629 

[Report No. 116–307] 

To amend the Fair Credit Reporting Act to establish clear Federal oversight 

of the development of credit scoring models by the Bureau of Consumer 

Financial Protection, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 9, 2019 

Mr. LYNCH introduced the following bill; which was referred to the Committee 

on Financial Services 

NOVEMBER 21, 2019 

Additional sponsor: Mr. CLEAVER

NOVEMBER 21, 2019 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on July 9, 2019] 


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A BILL 

To amend the Fair Credit Reporting Act to establish clear 

Federal oversight of the development of credit scoring 

models by the Bureau of Consumer Financial Protection, 

and for other purposes. 


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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 ‘‘Clarity in Credit Score 

5 Formation Act of 2019’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) The February 2015 report of the Bureau of 

9 Consumer Financial Protection titled ‘‘Consumer 

10 Voices on Credit Reports and Scores’’ found that some 

11 consumers are reluctant to comparison shop for loans 

12 and other types of consumer credit products out of 

13 fear that they will lower their credit scores by doing 

14 so. 

15 (2) The Bureau of Consumer Financial Protec16 tion found that one of the most common barriers for 

17 people in reviewing their own credit reports and 

18 shopping for the best credit terms was a lack of un19 derstanding of the differences between ‘‘soft’’ and 

20 ‘‘hard’’ inquiries and whether requesting a copy of 

21 their own report would adversely impact their credit 

22 standing. 

23 (3) The Bureau of Consumer Financial Protec24 tion revealed that consumers with accurate percepVerDate Sep 11 2014 19:58 Nov 21, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H3629.RH H3629

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1 tions of their creditworthiness may be better equipped 

2 to shop for favorable credit terms. 

3 SEC. 3. CONSUMER BUREAU OVERSIGHT OF CREDIT SCOR4 ING MODELS. 

5 The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) 

6 is amended— 

7 (1) by adding at the end the following new sec8 tion: 

9 ‘‘§ 630. Credit scoring models 

10 ‘‘(a) VALIDATED CREDIT SCORING MODELS.—Not 

11 later than 1 year after the date of the enactment of this 

12 section, the Bureau shall (in consultation with the Board 

13 of Governors of the Federal Reserve System, the Comptroller 

14 of the Currency, the Board of Directors of the Federal De15 posit Insurance Corporation, and the National Credit 

16 Union Administration Board) issue final regulations appli17 cable to any person that creates, maintains, utilizes, or pur18 chases credit scoring models used in making credit decisions 

19 to establish standards for validating the accuracy and pre20 dictive value of all such credit scoring models, both before 

21 release for initial use and at regular intervals thereafter, 

22 for as long as such credit scoring models are made available 

23 for purchase or use by such person. 

24 ‘‘(b) PROHIBITION.—At least once every 2 years, the 

25 Bureau shall conduct a review of credit scoring models to 


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1 determine whether the use of any particular factors, or the 

2 weight or consideration given to certain factors by credit 

3 scoring models, is inappropriate, including if such factors 

4 do not enhance or contribute to the accuracy and predictive 

5 value of the models. Upon the conclusion of its review, the 

6 Bureau may prohibit a person described in subsection (a) 

7 from weighing, considering, or including certain factors in, 

8 or making available for purchase or use, certain credit scor9 ing models or versions, as the Bureau determines appro10 priate.’’; and 

11 (2) in the table of contents for such Act, by add12 ing at the end the following new item: 

‘‘630. Credit scoring models.’’. 

13 SEC. 4. CONSUMER BUREAU STUDY AND REPORT TO CON14 GRESS ON THE IMPACT OF NON-TRADITIONAL 

15 DATA. 

16 (a) STUDY.—The Bureau of Consumer Financial Pro17 tection shall carry out a study to assess the impact (includ18 ing the availability and affordability of credit and other 

19 noncredit decisions, the potential positive and negative im20 pacts on consumer credit scores, and any unintended con21 sequences) of using traditional modeling techniques or alter22 native modeling techniques to analyze non-traditional data 

23 from a consumer report and of including non-traditional 

24 data on consumer reports on the following: 


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1 (1) Consumers with no or minimal traditional 

2 credit history. 

3 (2) Traditionally underserved communities and 

4 populations. 

5 (3) Consumers residing in rural areas. 

6 (4) Consumers residing in urban areas. 

7 (5) Racial and ethnic minorities and women. 

8 (6) Consumers across various income strata, par9 ticularly consumers earning less than 120 percent of 

10 the area median income (as defined by the Secretary 

11 of Housing and Urban Development). 

12 (7) Immigrants, refugees, and non-permanent 

13 residents. 

14 (8) Minority financial institutions (as defined 

15 under section 308(b) of the Financial Institutions Re16 form, Recovery, and Enforcement Act of 1989 (12 

17 U.S.C. 1463 note)) and community financial institu18 tions. 

19 (9) Consumers residing in federally assisted 

20 housing, including consumers receiving Federal rental 

21 subsidies. 

22 (b) ADDITIONAL CONSIDERATIONS.—In assessing im23 pacts under subsection (a), the Bureau of Consumer Finan24 cial Protection shall also consider impacts on— 


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1 (1) the privacy, security, and confidentiality of 

2 the financial, medical, and personally identifiable in3 formation of consumers; 

4 (2) the control of consumers over how such infor5 mation may or will be used or considered; 

6 (3) the understanding of consumers of how such 

7 information may be used or considered and the ease 

8 with which a consumer may decide to restrict or pro9 hibit such use or consideration of such information; 

10 (4) potential discriminatory effects; and 

11 (5) disparate outcomes the use or consideration 

12 of such information may cause. 

13 (c) CONSIDERATION OF RECENT GOVERNMENT STUD14 IES.—In assessing impacts under subsection (a), the Bu15 reau of Consumer Financial Protection shall also consider 

16 recent Government studies on alternative data, including— 

17 (1) the report of the Bureau of Consumer Finan18 cial Protection titled ‘‘CFPB Data Point: Becoming 

19 Credit Visible’’ (published June 2017); and 

20 (2) the report of the Comptroller General of the 

21 United States titled ‘‘Financial Technology: Agencies 

22 Should Provide Clarification on Lenders’ Use of Al23 ternative Data’’ (published December 2018). 

24 (d) REPORT.—Not later than 1 year after the date of 

25 the enactment of this Act, the Bureau of Consumer FinanVerDate Sep 11 2014 19:58 Nov 21, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H3629.RH H3629

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1 cial Protection shall issue a report to the Committee on Fi2 nancial Services of the House of Representatives and the 

3 Committee on Banking, Housing, and Urban Affairs of the 

4 Senate containing all findings and determinations, includ5 ing any recommendations for any legislative or regulatory 

6 changes, made in carrying out the study required under 

7 subsection (a). 

8 (e) DEFINITIONS.—In this section: 

9 (1) ALTERNATIVE MODELING TECHNIQUES.—The 

10 term ‘‘alternative modeling techniques’’ means statis11 tical and mathematical techniques that are not tradi12 tional modeling techniques, including decision trees, 

13 random forests, artificial neutral networks, nearest 

14 neighbor, genetic programming, and boosting algo15 rithms. 

16 (2) CONSUMER REPORT.—The term ‘‘consumer 

17 report’’ has the meaning given such term in section 

18 603 of the Fair Credit Reporting Act (15 U.S.C. 

19 1681a). 

20 (3) NON-TRADITIONAL DATA.—The term ‘‘non21 traditional data’’ means data related to telecommuni22 cations, utility payments, rent payments, remittances, 

23 wire transfers, data not otherwise regularly included 

24 in consumer reports issued by consumer reporting 

25 agencies described under section 603(p), and such 


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1 other items as the Bureau of Consumer Financial 

2 Protection deems appropriate. 

3 (4) TRADITIONAL MODELING TECHNIQUES.—The 

4 term ‘‘traditional modeling techniques’’ means statis5 tical and mathematical techniques (including models, 

6 algorithms, linear and logistic regression methods, 

7 and their outputs) that are traditionally used in 

8 automated underwriting processes. 


pamtmann on DSKBC07HB2PROD with BILLS
Union Calendar No. 248 

116TH CONGRESS 

1ST SESSION H. R. 3629 

[Report No. 116–307] 

A BILL 

To amend the Fair Credit Reporting Act to estabFinancial Protection, and for other purposes. credit scoring models by the Bureau of Consumer lish clear Federal oversight of the development of 

NOVEMBER 21, 2019 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


pamtmann on DSKBC07HB2PROD with BILLS