Bill Overview
Title: Expanding Access to Credit through Consumer-Permissioned Data Act
Description: This bill requires the consideration of additional credit information by a mortgage lender when evaluating a consumer's creditworthiness if a consumer requests that this information be considered. This additional information includes current payment and transaction information such as bank statements and rental payment history. Mortgage lenders must provide notice to mortgage applicants of their rights under this bill. Additionally, federal agencies that insure, guarantee, supplement, assist, or underwrite federally backed mortgage loans must also comply with these requirements.
Sponsors: Rep. Williams, Nikema [D-GA-5]
Target Audience
Population: People worldwide potentially impacted by changes in mortgage credit evaluation
Estimated Size: 80000000
- The bill impacts individuals who are applying for mortgage loans.
- Potentially, it benefits consumers who otherwise have a thin or non-traditional credit file.
- Significant number of adults in the US are potential home buyers or mortgage applicants.
- Globally, the impact is limited by the prevalence of countries with similar credit reporting systems that would adopt such policies.
- Many countries globally do not rely on centralized credit reporting as much as the US, so impact would generally be more in the US.
Reasoning
- The policy mainly impacts mortgage applicants, particularly those with thin or non-traditional credit histories.
- 80 million estimated potential beneficiaries in the US indicate a broad target scope for the policy.
- The budget, though limited, shows a strong federal commitment to improving credit accessibility.
- It's crucial to consider the geographical distribution as home ownership and mortgage application rates vary across states.
- Different demographics such as young adults, minorities, and lower-income families might see varied impacts.
Simulated Interviews
Freelance Graphic Designer (Los Angeles, CA)
Age: 28 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- This policy sounds promising as I'm worried about qualifying for a mortgage due to my freelancing income.
- Including my rental payment history could really help prove my creditworthiness.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 6 |
School Teacher (Houston, TX)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 15/20
Statement of Opinion:
- I have a decent credit score, but additional credit items always give lenders more to work with and might offer better rates.
- However, I hope they implement robust data privacy measures.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Healthcare Worker (Chicago, IL)
Age: 33 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 1.0 years
Commonness: 10/20
Statement of Opinion:
- Since I already own a house, this may not impact me directly unless considered for refinancing options.
- Still, more transparency in credit assessments is always a plus.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Software Engineer (San Francisco, CA)
Age: 25 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 8.0 years
Commonness: 14/20
Statement of Opinion:
- This could make a difference when I decide to buy a home as I'm starting my career.
- My current financial history doesn't show full ability to pay due to student loans brushstrokes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 6 |
Retired (Miami, FL)
Age: 60 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 0.0 years
Commonness: 18/20
Statement of Opinion:
- I work closely with real estate agents; this might make entry for first-time buyers easier.
- As a property owner, clearer mortgage processes can only contribute positively to the market.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Single Mother working as a nurse (New York, NY)
Age: 39 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 15.0 years
Commonness: 16/20
Statement of Opinion:
- I've been renting for years, maybe this will finally allow me to qualify for a loan!
- I know my credit cards are holding me back; hopefully, rental history will offset some of that.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 7 | 4 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 5 |
| Year 20 | 9 | 5 |
Farmer (Rural Iowa)
Age: 50 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 11/20
Statement of Opinion:
- For rural areas, often the challenge is not credit but opportunities.
- I am currently satisfied with my mortgage so unsure how much this will change things.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Self-employed consultant (Phoenix, AZ)
Age: 42 | Gender: female
Wellbeing Before Policy: 3
Duration of Impact: 12.0 years
Commonness: 9/20
Statement of Opinion:
- Finally a policy that might help boost my profile! It's tough overcoming a past bankruptcy in the traditional system.
- If they count current payments, my recent good behavior can shine.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 3 |
| Year 2 | 5 | 3 |
| Year 3 | 6 | 3 |
| Year 5 | 7 | 3 |
| Year 10 | 8 | 4 |
| Year 20 | 8 | 4 |
Construction Worker (Denver, CO)
Age: 30 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 13/20
Statement of Opinion:
- This might allow me to have my bank transactions considered, making me more eligible for better mortgage terms.
- I'm excited this policy might ease things for someone starting out.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
University Professor (Boston, MA)
Age: 55 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 3.0 years
Commonness: 17/20
Statement of Opinion:
- I see this policy helping first-time buyers more, but all improvements to mortgage fairness can have ripple effects for everyone.
- As an investor, easier entry for others strengthens the housing market.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Cost Estimates
Year 1: $120000000 (Low: $100000000, High: $150000000)
Year 2: $100000000 (Low: $80000000, High: $130000000)
Year 3: $100000000 (Low: $80000000, High: $130000000)
Year 5: $90000000 (Low: $70000000, High: $120000000)
Year 10: $80000000 (Low: $60000000, High: $110000000)
Year 100: $80000000 (Low: $60000000, High: $110000000)
Key Considerations
- The scale of the bill's impact depends on consumer awareness and willingness to utilize permissioned data for credit assessments.
- Industry readiness to integrate and standardize the use of additional data sources will influence implementation costs and effectiveness.
- Potential resistance or additional compliance costs for smaller mortgage lenders.