,,ii  #aaeth ,,congress  #ast ,session  
,s4 #afhe  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,august #a1    
#bjag,mr4 ,scott 7for himself and ,mr4  
,warner7 introduced the following bill2 
which was read twice and referred to the
 ,committee on ,banking1 ,housing1 and  
,urban ,affairs  ,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
 ,section #cjb7;b7 of the ,federal      
,national ,mortgage ,association        
,charter ,act 7#ab ,u4,s4,c4 #agag7;b77 
is amended by adding at the end the     
following3  7#g7  7,a7 ,definition ,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  7,b7 ,use of credit scores    
,the corporation may condition purchase 
of a residential mortgage by the        
corporation under this subsection 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 the
 credit score by all of the automated   
underwriting systems of the corporation 
and any other procedures and systems    
used by the corporation to purchase     
residential mortgages4  7,c7 ,validation
 and approval process ,the process      
described in subparagraph 7,b77ii7 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 that model1 and an assurance
 that the 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,d7 ,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     

those models under the process described
 in subparagraph 7,b77ii74  7,e7        
,timeframe for determination2 notice    
7i7 ,in general ,the corporation shall  
make a determination with respect to any
 application submitted under            
subparagraph 7,d71 and provide notice of
 that determination to the applicant1   
before a date established by the        
corporation that is not 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 a 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,d7 not later than #fj days after the 
date on which the application was       

submitted to the corporation4  7iv7     
,reasons for disapproval ,if an         
application submitted under subparagraph
 7,d7 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,f7     
,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,b77ii7 as the ,director  
determines necessary to ensure that the 
process remains appropriate1 adequate1  
and complies with any standards and     
criteria established pursuant to section
 #acbh of the ,federal ,housing         
,enterprises ,financial ,safety and     
,soundness ,act of #aiib4  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 following3  7d7  7#a7      
,definition ,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  7#b7 ,use of credit scores    
,the ,corporation may condition purchase
 of a residential mortgage by the       
,corporation 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 the credit score by 
all of the automated underwriting       
systems of the ,corporation and any     
other procedures and systems used by the
 ,corporation to purchase residential   
mortgages4  7#c7 ,validation and        
approval process ,the process described 
in paragraph 7#b77;,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 
that model and an assurance that the    
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#d7 ,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 those models under the 
process described in paragraph          
7#b77;,b74  7#e7 ,timeframe for         
determination2 notice  7,a7 ,in general 
,the ,corporation shall make a          
determination with respect to any       
application submitted under paragraph   
7#d71 and provide notice of that        
determination to the applicant1 before a
 date established by the ,corporation   
that is not 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#d7 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 submitted under paragraph   
7#d7 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#f7        
,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#b77;,b7 as the 
,director determines necessary to ensure
 that the process remains appropriate1  
adequate1 and complies with any         
standards and criteria established      

pursuant to section #acbh of the        
,federal ,housing ,enterprises          
,financial ,safety and ,soundness ,act  
of #aiib4  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 following3  #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 on the date 
that is #ahj days after the date of     
enactment of this ,act4