[Congressional Record Volume 167, Number 190 (Thursday, October 28, 2021)]
[Senate]
[Page S7470]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 3947. Mr. SCOTT of South Carolina (for himself and Mr. Blumenthal) 
submitted an amendment intended to be proposed to amendment SA 3867 
submitted by Mr. Reed and intended to be proposed to the bill H.R. 
4350, to authorize appropriations for fiscal year 2022 for military 
activities of the Department of Defense, for military construction, and 
for defense activities of the Department of Energy, to prescribe 
military personnel strengths for such fiscal year, and for other 
purposes; which was ordered to lie on the table; as follows:

        At the appropriate place in title X, insert the following:

     SEC. 10__. 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.
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