,i  #aaeth ,,congress  #ast ,session    
,h4 ,r4 #hih  ,,in ,,the ,,house ,,of   
,,representatives  ,february #g1        
#bjag,mr4 ,royce of ,california 7for    
himself1 ,ms4 ,sinema1 and ,ms4 ,sewell 
of ,alabama7 introduced the following   
bill2 which was referred to the         
,committee on ,financial ,services  ,a  
,,bill  ,to require ,fannie ,mae and    
,freddie ,mac to establish procedures   
for considering certain credit scores in
 making a determination whether to      
purchase a residential mortgage1 and for
 other purposes4  #a4 ,short title ,this
 ,act may be cited as the ,credit ,score
 ,competition ,act of #bjag4  #b4       
,credit score validation2 validation    
process  7a7 ,use of credit scores by   
,fannie ,mae in purchasing residential  
mortgages ,subsection 7b7 of section    
#cjb of the ,federal ,national ,mortgage
 ,association ,charter ,act 7#ab        
,u4,s4,c4 #agag7;b77 is amended by      
adding at the end the following new     
paragraph3  7#g7  7,a7 ,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--
  7i7 the credit score is derived from  
any credit scoring model that has been  
validated and approved by the           
corporation under this paragraph2  7ii7 
the corporation has established and made
 publicly available a description of the
 process the corporation will use to    
validate and approve credit scoring     
models1 which process shall comply with 
any standards and criteria established  
by the ,director of the ,federal        
,housing ,finance ,agency pursuant to   
section #acbh of the ,federal ,housing  
,enterprises ,financial ,safety and     
,soundness ,act of #aiib2 and  7iii7 the
 corporation provides for the use of    
such credit score by all of its         
automated underwriting systems and any  
other procedures and systems used to    
purchase residential mortgages4  7,b7   
,validation and approval process ,the   

process described in subparagraph       
7,a77ii7 shall include an evaluation    
of-- 7i7 the criteria used to validate  
and approve a credit scoring model1     
including measures of the integrity1    
reliability1 and accuracy of such model1
 and an assurance that such model is    
consistent with the safe and sound      
operation of the corporation2 and  7ii7 
the data necessary for the validation of
 the credit scoring model4  7,c7        
,application ,if the corporation elects 
to use a credit score under this        
paragraph1 the corporation shall solicit
 applications from developers of credit 
scoring models for the validation and   
approval of such models under the       
process described in subparagraph       
7,a77ii74  7,d7 ,timeframe for          
determination2 notice  7i7 ,in general  
,the corporation shall establish a date 
before which the corporation shall make 
a determination with respect to any     
application submitted under subparagraph
 7,c7 and provide notice of such        

determination to the applicant4 ,such   
date shall not be later than #ahj days  
after the date on which an application  
is submitted to the corporation4  7ii7  
,extensions ,the ,director of the       
,federal ,housing ,finance ,agency may  
authorize up to #b extensions of the    
date established under clause 7i71 each 
of which shall not exceed #cj days1 upon
 the written request and a showing of   
good cause by the corporation4  7iii7   
,status notice ,the corporation shall   
provide notice to an applicant regarding
 the status of an application submitted 
under subparagraph 7,c7 not later than  
#fj days after the date on which the    
application was submitted to the        
corporation4  7iv7 ,reasons for         
disapproval ,if an application is       
disapproved1 the corporation shall      
provide to the applicant the reasons for
 the disapproval not later than #cj days
 after a determination is made under    
this subparagraph4  7,e7 ,authority of  
,director ,if the corporation elects to 

use a credit score under this paragraph1
 the ,director of the ,federal ,housing 
,finance ,agency shall require the      
corporation to routinely update the     
validation and approval process         
described in subparagraph 7,a77ii7 as   
the ,director1 in the ,director's       
discretion1 deems to be necessary to    
ensure such process remains appropriate 
and adequate and complies with any      
standards and criteria established      
pursuant to section #acbh of the        
,federal ,housing ,enterprises          
,financial ,safety and ,soundness ,act  
of #aiib4  7,f7 ,credit score defined   
,in this paragraph1 the term credit     
score means a numerical value or a      
categorization derived from a           
statistical tool or modeling system used
 by a person who makes or arranges a    
loan to predict the likelihood of       
certain credit behaviors1 including     
default4  4  7b7 ,use of credit scores  
by ,freddie ,mac in purchasing          
residential mortgages ,section #cje of  

the ,federal ,home ,loan ,mortgage      
,corporation ,act 7#ab ,u4,s4,c4 #aded7 
is amended by adding at the end the     
following new subsection3  7d7  7#a7    
,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--  7,a7 the credit 
score is derived from any credit scoring
 model that has been validated and      
approved by the ,corporation under this 
subsection2  7,b7 the ,corporation has  
established and made publicly available 
a description of the process the        
corporation will use to validate and    
approve credit scoring models1 which    
shall comply with any standards and     
criteria established by the ,director of
 the ,federal ,housing ,finance ,agency 
pursuant to section #acbh of the        
,federal ,housing ,enterprises          
,financial ,safety and ,soundness ,act  
of #aiib2 and  7,c7 the ,corporation    
provides for use of such credit score by

 all of its automated underwriting      
systems and any other procedures and    
systems used to purchase residential    
mortgages4  7#b7 ,validation and        
approval process ,the process described 
in paragraph 7#a77;,b7 shall include an 
evaluation of-- 7,a7 the criteria used  
to validate and approve a credit scoring
 model1 including measures of the       
integrity1 reliability1 and accuracy of 
such model and an assurance that such   
model is consistent with the safe and   
sound operation of the ,corporation2 and
  7,b7 the data necessary for the       
validation of the credit scoring model4 
7#c7 ,application ,if the ,corporation  
elects to use a credit score under this 
subsection1 the ,corporation shall      
solicit applications from developers of 
credit scoring models for the validation
 and approval of such models under the  
process described in paragraph          
7#a77;,b74  7#d7 ,timeframe for         
determination2 notice  7,a7 ,in general 
,the ,corporation shall establish a date

 before which the ,corporation shall    
make a determination with respect to any
 application submitted under paragraph  
7#c7 and provide notice of such         
determination to the applicant4 ,such   
date shall not be later than #ahj days  
after the date on which an application  
is submitted to the ,corporation4  7,b7 
,extensions ,the ,director of the       
,federal ,housing ,finance ,agency may  
authorize up to #b extensions of the    
date established under subparagraph     
7,a71 each of which shall not exceed #cj
 days1 upon the written request and a   
showing of good cause by the            
,corporation4  7,c7 ,status notice ,the 
,corporation shall provide notice to an 
applicant regarding the status of an    
application submitted under paragraph   
7#c7 not later than #fj days after the  
date on which the application was       
submitted to the corporation4  7,d7     
,reasons for disapproval ,if an         
application is disapproved1 the         
corporation shall provide to the        

applicant the reasons for the           
disapproval not later than #cj days     
after a determination is made under this
 paragraph4  7#e7 ,authority of         
,director ,if the ,corporation elects to
 use a credit score under this          
subsection1 the ,director of the        
,federal ,housing ,finance ,agency shall
 require the ,corporation to routinely  
update the validation and approval      
process described in paragraph 7#a77;,b7
 as the ,director1 in the ,director's   
discretion1 deems to be necessary to    
ensure such process remains appropriate 
and adequate and complies with any      
standards and criteria established      
pursuant to section #acbh of the        
,federal ,housing ,enterprises          
,financial ,safety and ,soundness ,act  
of #aiib4  7#f7 ,credit score defined   
,in this subsection1 the term credit    
score means a numerical value or a      
categorization derived from a           
statistical tool or modeling system used
 by a person who makes or arranges a    

loan to predict the likelihood of       
certain credit behaviors1 including     
default4  4  #c4 ,authority of ,director
 of the ,federal ,housing ,finance      
,agency ,subpart ,a of part #b of       
subtitle ,a of the ,federal ,housing    
,enterprises ,financial ,safety and     
,soundness ,act of #aiib 7#ab ,u4,s4,c4 
#deda et seq47 is amended by adding at  
the end the following new section3      
#acbh4 ,regulations for use of credit   
scores ,the ,director may1 by           
regulation1 establish standards and     
criteria for any process used by an     
enterprise to validate and approve      
credit scoring models pursuant to       
section #cjb7;b77#g7 of the ,federal    
,national ,mortgage ,association        
,charter ,act and section #cje7;d7 of   
the ,federal ,home ,loan ,mortgage      
,corporation ,act4  4  #d4 ,effective   
date ,the amendments made by this ,act  
shall take effect #ahj days after the   
date of enactment of this ,act4