I 
116TH CONGRESS 
1ST SESSION H. R. 3629 
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 
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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Clarity in Credit Score 
Formation Act of 2019’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
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(1) The February 2015 report of the Bureau of 
Consumer Financial Protection titled ‘‘Consumer 
Voices on Credit Reports and Scores’’ found that 
some consumers are reluctant to comparison shop 
for loans and other types of consumer credit prod-
ucts out of fear that they will lower their credit 
scores by doing so. 
(2) The Bureau of Consumer Financial Protec-
tion found that one of the most common barriers for 
people in reviewing their own credit reports and 
shopping for the best credit terms was a lack of un-
derstanding of the differences between ‘‘soft’’ and 
‘‘hard’’ inquiries and whether requesting a copy of 
their own report would adversely impact their credit 
standing. 
(3) The Bureau of Consumer Financial Protec-
tion revealed that consumers with accurate percep-
tions of their creditworthiness may be better 
equipped to shop for favorable credit terms. 
SEC. 3. CFPB OVERSIGHT OF CREDIT SCORING MODELS. 
(a) IN GENERAL.—The Fair Credit Reporting Act 
(15 U.S.C. 1681 et seq.) is amended— 
(1) by adding at the end the following new sec-
tion: 
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‘‘§ 630. Credit scoring models 
‘‘(a) VALIDATED CREDIT SCORING MODELS.—Not 
later than 1 year after the date of the enactment of this 
section, the Bureau shall issue final regulations applicable 
to any person that creates, maintains, or purchases credit 
scoring models used in making credit decisions to establish 
standards for validating the accuracy and predictive value 
of all such credit scoring models, both before release for 
initial use and at regular intervals thereafter, for as long 
as such credit scoring models are made available for pur-
chase or use by such person. 
‘‘(b) PROHIBITION.—At least once every 2 years, the 
Bureau shall conduct a review of credit scoring models to 
determine whether the use of any particular factors, or 
the weight or consideration given to certain factors by 
credit scoring models, is inappropriate, including if such 
factors do not enhance or contribute to the accuracy and 
predictive value of the models. Upon the conclusion of its 
review, the Bureau may prohibit a person described in 
subsection (a) from weighing, considering, or including 
certain factors in, or making available for purchase or use, 
certain credit scoring models or versions, as the Bureau 
determines appropriate.’’; and 
(2) in the table of contents for such Act, by 
adding at the end the following new item: 
‘‘630. Credit scoring models.’’. 
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(b) RULEMAKING.—Not later than the end of the 2- 
year period beginning on the date of the enactment of this 
Act, the Bureau of Consumer Financial Protection shall 
issue final rules to implement the amendments made by 
this section. 
SEC. 4. CFPB STUDY AND REPORT TO CONGRESS ON THE 
IMPACT OF NON-TRADITIONAL DATA. 
(a) STUDY.—The Bureau of Consumer Financial 
Protection shall carry out a study to assess the impact 
(including the availability and affordability of credit and 
other noncredit decisions, the potential positive and nega-
tive impacts on consumer credit scores, and any unin-
tended consequences) of using traditional modeling tech-
niques or alternative modeling techniques to analyze non- 
traditional data from a consumer report and of including 
non-traditional data on consumer reports on the following: 
(1) Consumers with no or minimal traditional 
credit history. 
(2) Traditionally underserved communities and 
populations. 
(3) Consumers residing in rural areas. 
(4) Consumers residing in urban areas. 
(5) Racial and ethnic minorities and women. 
(6) Consumers across various income strata, 
particularly consumers earning less than 120 per-
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cent of the area median income (as defined by the 
Secretary of Housing and Urban Development). 
(7) Immigrants, refugees, and non-permanent 
residents. 
(8) Minority financial institutions (as defined 
under section 308(b) of the Financial Institutions 
Reform, Recovery, and Enforcement Act of 1989 
(12 U.S.C. 1463 note)) and community financial in-
stitutions. 
(9) Consumers residing in federally assisted 
housing, including consumers receiving Federal rent-
al subsidies. 
(b) ADDITIONAL
CONSIDERATIONS.—In assessing 
impacts under subsection (a), the Bureau of Consumer Fi-
nancial Protection shall also consider impacts on— 
(1) the privacy, security, and confidentiality of 
the financial, medical, and personally identifiable in-
formation of consumers; 
(2) the control of consumers over how such in-
formation may or will be used or considered; 
(3) the understanding of consumers of how 
such information may be used or considered and the 
ease with which a consumer may decide to restrict 
or prohibit such use or consideration of such infor-
mation; 
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(4) potential discriminatory effects; and 
(5) disparate outcomes the use or consideration 
of such information may cause. 
(c) REPORT.—Not later than 1 year after the date 
of the enactment of this Act, the Bureau of Consumer Fi-
nancial Protection shall issue a report to the Committee 
on Financial Services of the House of Representatives and 
the Committee on Banking, Housing, and Urban Affairs 
of the Senate containing all findings and determinations, 
including any recommendations for any legislative or regu-
latory changes, made in carrying out the study required 
under subsection (a). 
(d) DEFINITIONS.—In this section: 
(1) ALTERNATIVE
MODELING
TECHNIQUES.— 
The term ‘‘alternative modeling techniques’’ means 
statistical and mathematical techniques that are not 
traditional modeling techniques, including decision 
trees, random forests, artificial neutral networks, 
nearest neighbor, genetic programming, and boost-
ing algorithms. 
(2) CONSUMER REPORT.—The term ‘‘consumer 
report’’ has the meaning given such term in section 
603 of the Fair Credit Reporting Act (15 U.S.C. 
1681a). 
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(3) NON-TRADITIONAL DATA.—The term ‘‘non- 
traditional data’’ means data related to tele-
communications, utility payments, rent payments, 
remittances, wire transfers, data not otherwise regu-
larly included in consumer reports issued by con-
sumer reporting agencies described under section 
603(p), and such other items as the Bureau of Con-
sumer Financial Protection deems appropriate. 
(4) TRADITIONAL
MODELING
TECHNIQUES.— 
The term ‘‘traditional modeling techniques’’ means 
statistical and mathematical techniques (including 
models, algorithms, linear and logistic regression 
methods, and their outputs) that are traditionally 
used in automated underwriting processes. 
Æ 
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