The Federal Housing Finance Agency’s recalibration of the credit scoring framework, including implementing a “bi-merge” credit reporting policy, does not adequately address impacts of the changes, CUNA and other organizations wrote to the FHFA Thursday. FHFA is moving away from requiring three scores (a “tri-merge” score based on median) to the “bi-merge” made of the average of two scores.
“The transition, as outlined, will occur in a multi-stage process that does not adequately address the far-reaching impacts, significant costs, and immense operational complexity of the policy changes. We write to urge FHFA to reformulate the proposed timeline to provide sufficient time and an adaptable structure that will permit stakeholder feedback to be considered and incorporated,” the letter reads. “A disciplined and orderly transition will minimize risk to the stability of the housing finance system.”
CUNA and the organizations believe the credit score policy implementation plan should be adjusted to include:
“We believe that, if FHFA were to adopt these recommendations and adjust the implementation process accordingly, a well-coordinated and sensibly paced execution strategy could minimize disruption to the housing finance system,” the letter reads. “However, without a commitment from FHFA to make these adjustments, we have significant concerns about the current plan’s risks to the housing finance ecosystem.”