Building Credit Access for Veterans Act of 2022
This bill requires the Department of Veterans Affairs (VA) to implement a pilot program to assess the feasibility and advisability of using alternative credit scoring information or models to improve the determination of creditworthiness of certain individuals and to increase the number of such individuals who are able to obtain VA housing and small business loans. Specifically, the program is for veterans or members of the Armed Forces who are eligible for VA housing or small business loans and have insufficient credit history.
Under the program, the VA must assess the feasibility and advisability of establishing criteria for acceptable commercially available credit scoring models to be used by lenders for the purpose of guaranteeing or insuring a VA housing or small business loan.
Participation is voluntary on an opt-in basis for lenders, borrowers, and individuals.
The VA must conduct outreach to lenders and individuals to inform them of the pilot program.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8758 Introduced in House (IH)]
<DOC>
117th CONGRESS
2d Session
H. R. 8758
To require the Secretary of Veterans Affairs to carry out a pilot
program on using alternative credit scoring information for veterans
and members of the Armed Forces, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
August 30, 2022
Mr. Levin of California (for himself and Mr. Timmons) introduced the
following bill; which was referred to the Committee on Veterans'
Affairs
_______________________________________________________________________
A BILL
To require the Secretary of Veterans Affairs to carry out a pilot
program on using alternative credit scoring information for veterans
and members of the Armed Forces, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Building Credit Access for Veterans
Act of 2022''.
SEC. 2. DEPARTMENT OF VETERANS AFFAIRS PILOT PROGRAM ON USE OF
ALTERNATIVE CREDIT SCORING INFORMATION OR CREDIT SCORING
MODELS.
(a) Pilot Program Required.--
(1) In general.--Not later than one year after the date of
the enactment of this Act, the Secretary of Veterans Affairs
shall commence carrying out a pilot program that will assess
the feasibility and advisability of--
(A) using alternative credit scoring information or
credit scoring models using alternative credit scoring
methodology for an individual described in paragraph
(2)--
(i) to improve the determination of
creditworthiness of such an individual; and
(ii) to increase the number of such
individuals who are able to obtain a loan
guaranteed or insured under chapter 37 of title
38, United States Code; and
(B) in consultation with such entities as the
Secretary considers appropriate, establishing criteria
for acceptable commercially available credit scoring
models to be used by lenders for the purpose of
guaranteeing or insuring a loan under chapter 37 of
title 38, United State Code.
(2) Individual described.--An individual described in this
paragraph is a veteran or a member of the Armed Forces who--
(A) is eligible for a loan under chapter 37 of
title 38, United States Code; and
(B) has an insufficient credit history for a lender
or the Secretary to determine the creditworthiness of
the individual.
(3) Alternative credit scoring information.--Alternative
credit scoring information described in paragraph (1)(A) may
include proof of rent, utility, and insurance payment
histories, and such other information as the Secretary
considers appropriate.
(b) Voluntary Participation.--
(1) In general.--The Secretary shall ensure that any
participation in the pilot program is voluntary on an opt-in
basis for a lender, a borrower, and an individual described in
subsection (a)(2).
(2) Notice of participation.--Subject to paragraph (3), any
lender who participates in the pilot program shall--
(A) notify each individual described in subsection
(a)(2) who, during the pilot program, applies for a
loan under chapter 37 of title 38, United States Code,
from such lender, of the lender's participation in the
pilot program; and
(B) offer such individual the opportunity to
participate in the pilot program.
(3) Limitation.--
(A) In general.--The Secretary may establish a
limitation on the number of individuals and lenders
that may participate in the pilot program.
(B) Report.--If the Secretary limits participation
in the pilot program under subparagraph (A), the
Secretary shall, not later than 15 days after
establishing such limitation, submit to Congress a
report setting forth the reasons for establishing such
limitation.
(c) Approval of Credit Scoring Models.--
(1) In general.--A lender participating in the pilot
program may not use a credit scoring model under subsection
(a)(1)(A) until the Secretary has reviewed and approved such
credit scoring model for purposes of the pilot program.
(2) Publication of criteria.--The Secretary shall publish
in the Federal Register any criteria established under
subsection (a)(1)(B) for acceptable commercially available
credit scoring models that use alternative credit scoring
information described in subsection (a)(1)(A) to be used for
purposes of the pilot program.
(3) Considerations; approval of certain models.--In
selecting credit scoring models to approve under this section,
the Secretary shall--
(A) consider the criteria for credit score
assessments under section 1254.7 of title 12, Code of
Federal Regulations; and
(B) approve any commercially available credit
scoring model that has been approved pursuant to
section 302(b)(7) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1717(b)(7)) or
section 305(d) of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1454)(d)).
(d) Outreach.--To the extent practicable, the Secretary shall
conduct outreach to lenders and individuals described in subsection
(a)(2) to inform such persons of the pilot program.
(e) Report.--
(1) In general.--Not later than two years after the date of
the enactment of this Act, the Secretary shall submit to
Congress a report on the pilot program.
(2) Contents.--The report submitted under paragraph (1)
shall include the following:
(A) The findings of the Secretary with respect to
the feasibility and advisability of using alternative
credit scoring information or credit scoring models
using alternative credit scoring methodology for
individuals described in subsection (a)(2).
(B) A description of the efforts of the Secretary
to assess the feasibility and advisability of using
alternative credit scoring information or credit
scoring models as described in subparagraph (A).
(C) To the extent practicable, the following:
(i) The rate of participation in the pilot
program.
(ii) An assessment of whether participants
in the pilot program benefitted from such
participation.
(D) An assessment of the effect of the pilot
program on the subsidy rate for loans guaranteed or
insured by the Secretary under chapter 37 of title 38,
United States Code.
(E) Such other information as the Secretary
considers appropriate.
(f) Termination.--
(1) In general.--The Secretary shall complete the pilot
program required by subsection (a)(1) not later than September
30, 2025.
(2) Effect on loans and applications.--The termination of
the pilot program under paragraph (1) shall not affect a loan
guaranteed, or for which loan applications have been received
by a participating lender, on or before the date of the
completion of the pilot program.
(g) Insufficient Credit History Defined.--In this section, the term
``insufficient credit history'', with respect to an individual
described in subsection (a)(2), means that the individual does not have
a credit record with one of the national credit reporting agencies or
such credit record contains insufficient credit information to assess
creditworthiness.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Veterans' Affairs.
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