Expanding Access to Credit through Consumer-Permissioned Data Act

Key Points

• This bill would require mortgage lenders to consider alternative credit data like rent payments and bank statements when a borrower asks them to. Right now, many lenders rely only on traditional credit scores, which can shut out people who have not used credit cards or taken out loans.
• The alternative data must be treated with the same weight as information from a traditional credit report. Lenders can only reject the data if they find evidence of a material misrepresentation.
• About 32 million Americans have little or no credit history with the major credit reporting agencies. This group disproportionately includes lower-income consumers, younger consumers, and people of color.
• Every mortgage applicant would receive a notice explaining their right to submit alternative credit information. These notices must be available in the eight most common languages spoken by people with limited English proficiency.
• Federal agencies that back mortgage loans, including those overseeing Fannie Mae and Freddie Mac, would need to update their automated underwriting systems to handle this new consumer-permissioned data.
• The CFPB would have 18 months after the bill becomes law to write the final rules, and lenders would need to comply once those rules take effect.