I 
114TH CONGRESS 
1ST SESSION H. R. 4211 
To require Fannie Mae and Freddie Mac to establish procedures for consid-
ering certain credit scores in making a determination whether to purchase 
a residential mortgage, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 10, 2015 
Mr. ROYCE (for himself and Ms. SEWELL of Alabama) introduced the 
following bill; which was referred to the Committee on Financial Services 
A BILL 
To require Fannie Mae and Freddie Mac to establish proce-
dures for considering certain credit scores in making 
a determination whether to purchase a residential mort-
gage, 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 ‘‘Credit Score Competi-
tion Act of 2015’’. 
SEC. 2. CREDIT SCORE VALIDATION; VALIDATION PROCESS. 
(a) USE OF CREDIT SCORES BY FANNIE MAE IN 
PURCHASING RESIDENTIAL MORTGAGES.—Subsection (b) 
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of section 302 of the Federal National Mortgage Associa-
tion Charter Act (12 U.S.C. 1717(b)) is amended by add-
ing at the end the following new paragraph: 
‘‘(7)(A) USE OF CREDIT SCORES.—The corporation 
may condition its purchase of a residential mortgage 
under this section on the provision of a credit score for 
the borrower only if— 
‘‘(i) the credit score is derived from any credit 
scoring model that has been validated and approved 
by the corporation under this paragraph; 
‘‘(ii) the corporation has established and made 
publicly available a description of the process the 
corporation will use to validate and approve credit 
scoring models, which process shall comply with any 
standards and criteria established by the Director of 
the Federal Housing Finance Agency pursuant to 
section 1328 of the Federal Housing Enterprises Fi-
nancial Safety and Soundness Act of 1992; and 
‘‘(iii) the corporation provides for the use of 
such credit score by all of its automated under-
writing systems and any other procedures and sys-
tems used to purchase residential mortgages. 
‘‘(B) VALIDATION AND APPROVAL PROCESS.—The 
process described in subparagraph (A)(ii) shall include an 
evaluation of— 
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‘‘(i) the criteria used to validate and approve a 
credit scoring model, including measures of the in-
tegrity, reliability, and accuracy of such model, and 
an assurance that such model is consistent with the 
safe and sound operation of the corporation; and 
‘‘(ii) the data necessary for the validation of the 
credit scoring model. 
‘‘(C) APPLICATION.—If the corporation elects to use 
a credit score under this paragraph, the corporation shall 
solicit applications from developers of credit scoring mod-
els for the validation and approval of such models under 
the process described in subparagraph (A)(ii). 
‘‘(D) TIMEFRAME FOR DETERMINATION; NOTICE.— 
‘‘(i) IN GENERAL.—The corporation shall estab-
lish a date before which the corporation shall make 
a determination with respect to any application sub-
mitted under subparagraph (C) and provide notice 
of such determination to the applicant. Such date 
shall not be later than 180 days after the date on 
which an application is submitted to the corporation. 
‘‘(ii) EXTENSIONS.—The Director of the Fed-
eral Housing Finance Agency may authorize up to 
2 extensions of the date established under clause (i), 
each of which shall not exceed 30 days, upon the 
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written request and a showing of good cause by the 
corporation. 
‘‘(iii) STATUS NOTICE.—The corporation shall 
provide notice to an applicant regarding the status 
of an application submitted under subparagraph (C) 
not later than 60 days after the date on which the 
application was submitted to the corporation. 
‘‘(iv) REASONS FOR DISAPPROVAL.—If an appli-
cation is disapproved, the corporation shall provide 
to the applicant the reasons for the disapproval not 
later than 30 days after a determination is made 
under this subparagraph. 
‘‘(E) AUTHORITY OF DIRECTOR.—If the corporation 
elects to use a credit score under this paragraph, the Di-
rector of the Federal Housing Finance Agency shall re-
quire the corporation to routinely update the validation 
and approval process described in subparagraph (A)(ii) as 
the Director, in the Director’s discretion, deems to be nec-
essary to ensure such process remains appropriate and 
adequate and complies with any standards and criteria es-
tablished pursuant to section 1328 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992. 
‘‘(F) CREDIT SCORE DEFINED.—In this paragraph, 
the term ‘credit score’ means a numerical value or a cat-
egorization derived from a statistical tool or modeling sys-
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tem used by a person who makes or arranges a loan to 
predict the likelihood of certain credit behaviors, including 
default.’’. 
(b) USE OF CREDIT SCORES BY FREDDIE MAC IN 
PURCHASING RESIDENTIAL MORTGAGES.—Section 305 of 
the Federal Home Loan Mortgage Corporation Act (12 
U.S.C. 1454) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(d)(1) USE OF CREDIT SCORES.—The Corporation 
may condition its purchase of a residential mortgage 
under this section on the provision of a credit score for 
the borrower only if— 
‘‘(A) the credit score is derived from any credit 
scoring model that has been validated and approved 
by the Corporation under this subsection; 
‘‘(B) the Corporation has established and made 
publicly available a description of the process the 
corporation will use to validate and approve credit 
scoring models that, which process shall comply with 
any standards and criteria established by the Direc-
tor of the Federal Housing Finance Agency pursu-
ant to section 1328 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992; 
and 
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‘‘(C) the Corporation provides for use of such 
credit score by all of its automated underwriting sys-
tems and any other procedures and systems used to 
purchase residential mortgages. 
‘‘(2) VALIDATION AND APPROVAL PROCESS.—The 
process described in paragraph (1)(B) shall include an 
evaluation of— 
‘‘(A) the criteria used to validate and approve 
a credit scoring model, including measures of the in-
tegrity, reliability, and accuracy of such model and 
an assurance that such model is consistent with the 
safe and sound operation of the Corporation; and 
‘‘(B) the data necessary for the validation of 
the credit scoring model. 
‘‘(3) APPLICATION.—If the Corporation elects to use 
a credit score under this subsection, the Corporation shall 
solicit applications from developers of credit scoring mod-
els for the validation and approval of such models under 
the process described in paragraph (1)(B). 
‘‘(4) TIMEFRAME FOR DETERMINATION; NOTICE.— 
‘‘(A) IN GENERAL.—The Corporation shall es-
tablish a date before which the Corporation shall 
make a determination with respect to any applica-
tion submitted under paragraph (3) and provide no-
tice of such determination to the applicant. Such 
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date shall not be later than 180 days after the date 
on which an application is submitted to the Corpora-
tion. 
‘‘(B) EXTENSIONS.—The Director of the Fed-
eral Housing Finance Agency may authorize up to 
2 extensions of the date established under subpara-
graph (A), each of which shall not exceed 30 days, 
upon the written request and a showing of good 
cause by the Corporation. 
‘‘(C) STATUS NOTICE.—The Corporation shall 
provide notice to an applicant regarding the status 
of an application submitted under paragraph (3) not 
later than 60 days after the date on which the appli-
cation was submitted to the corporation. 
‘‘(D) REASONS FOR DISAPPROVAL.—If an ap-
plication is disapproved, the corporation shall pro-
vide to the applicant the reasons for the disapproval 
not later than 30 days after a determination is made 
under this paragraph. 
‘‘(5) AUTHORITY OF DIRECTOR.—If the Corporation 
elects to use a credit score under this subsection, the Di-
rector of the Federal Housing Finance Agency shall re-
quire the Corporation to routinely update the validation 
and approval process described in paragraph (1)(B) as the 
Director, in the Director’s discretion, deems to be nec-
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essary to ensure such process remains appropriate and 
adequate and complies with any standards and criteria es-
tablished pursuant to section 1328 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992. 
‘‘(6) CREDIT SCORE DEFINED.—In this subsection, 
the term ‘credit score’ means a numerical value or a cat-
egorization derived from a statistical tool or modeling sys-
tem used by a person who makes or arranges a loan to 
predict the likelihood of certain credit behaviors, including 
default.’’. 
SEC. 3. AUTHORITY OF DIRECTOR OF THE FEDERAL HOUS-
ING FINANCE AGENCY. 
Subpart A of part 2 of subtitle A of the (12 U.S.C. 
4541 et seq.) is amended by adding at the end the fol-
lowing new section: 
‘‘SEC. 1328. REGULATIONS FOR USE OF CREDIT SCORES. 
‘‘The Director may, by regulation, establish stand-
ards and criteria for any process used by an enterprise 
to validate and approve credit scoring models pursuant to 
section 302(b)(7) of the Federal National Mortgage Asso-
ciation Charter Act and section 305(d) of the Federal 
Home Loan Mortgage Corporation Act.’’. 
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