[Congressional Record Volume 169, Number 119 (Wednesday, July 12, 2023)]
[Senate]
[Page S2443]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 280. Mr. SCOTT of South Carolina submitted an amendment intended
to be proposed by him to the bill S. 2226, to authorize appropriations
for fiscal year 2024 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, 2027.
(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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