WASHINGTON—The FHFA should be more “transparent” with its data and analyses regarding credit scoring models and the shift to bi-merge reporting, according to a letter sent by CUNA, NAFCU and a number of other trade associations.
“As a critical first step of the implementation process, we ask that FHFA provide its analysis as well as the data and findings from the Enterprises’ comprehensive testing and assessment,” the letter states. Transparency into these analyses and assessment findings will greatly enhance and facilitate productive implementation planning discussions in FHFA’s and the Enterprises’ ongoing public engagement sessions.”
What Test Results Might Provide
In addition, the groups suggested the results from the tests performed by the government-sponsored enterprises Fannie Mae and Freddie Mac would
- Provide insight on how the new scores reflect a borrower’s ability to repay
- Support the reliability and accuracy of how the scores perform through different economic cycles
- Confirm the integrity and comprehensiveness of the data used to capture a borrower’s credit history and calculate a representative credit score
- Provide a sample framework for how the FHFA and the GSEs conducted their analyses and could be used for supplemental support in gaining acceptance of these new models with regulators, rating agencies, and other oversight entities
‘Release the Full Scope’
“We urge FHFA and the Enterprises to release the full scope of results from the Enterprises’ testing as it would provide the industry with beneficial information that would aid in the preparation for implementation and enhance analysis that stakeholders will soon undertake,” concluded the groups. “We believe that transparency in this area would help facilitate a smooth and effective implementation process that would minimize market disruption.”
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