Bill Overview
Title: Building Credit Access for Veterans Act of 2022
Description: 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.
Sponsors: Rep. Levin, Mike [D-CA-49]
Target Audience
Population: Veterans and eligible Armed Forces members lacking sufficient credit history for VA loans
Estimated Size: 5000000
- The bill specifically targets veterans or members of the Armed Forces who are eligible for VA loans but have insufficient credit history.
- The majority of the individuals impacted are veterans and active-duty service members.
- According to the US Department of Veterans Affairs, there are approximately 19 million veterans in the United States.
- Not all veterans or service members wish to or need to use VA housing or small business loans and only a subset lack sufficient credit history.
- The program requires individuals to opt-in, which further limits the potential applicant pool.
Reasoning
- The Building Credit Access for Veterans Act of 2022 primarily impacts veterans and active service members with insufficient credit histories, as it focuses on alternative credit scoring models to improve loan eligibility.
- Given the pilot nature of the program, it will have a limited reach initially, affecting only a subset of the estimated 5 million target individuals due to budgetary constraints and the opt-in requirement.
- Interviewing a diverse range of veterans and service members, including those both affected and unaffected by the policy, helps us understand the broader impact and perception.
- For individuals who gain access to credit due to the policy, we could expect an increase in their wellbeing scores, as financial stability typically contributes to overall wellbeing.
- The pilot's success also hinges on effective outreach, education, and the willingness of lenders to participate, which will influence the policy's immediate and long-term effects.
- Simulated interviews capture variations in impact, such as high impact for those directly obtaining loans, low or no impact for those ineligible or uninterested.
Simulated Interviews
Veteran, Small Business Owner (San Diego, CA)
Age: 32 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 7/20
Statement of Opinion:
- I think this pilot program is a great idea, because having alternative ways to demonstrate creditworthiness could really help people like me who have a good job but a problematic credit history due to serving.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 8 |
Army Reservist (Austin, TX)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- This program might help people with fluctuating or uncertain income levels due to reserve status. I would consider opting in if it truly aids in loan approvals.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 8 |
Retired and Volunteer (Miami, FL)
Age: 60 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 12/20
Statement of Opinion:
- While I don't need new credit right now, I can see how this would have benefited me when I first retired. Good for those coming out of service these days.
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 |
Active Duty Navy (New York, NY)
Age: 27 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 8/20
Statement of Opinion:
- Access to VA loans means a lot for planning my future, especially being able to afford a home sooner while still serving.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 9 | 6 |
| Year 3 | 9 | 6 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 8 |
Veteran, Technical Specialist (Chicago, IL)
Age: 39 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 15.0 years
Commonness: 6/20
Statement of Opinion:
- It would be great if something like this actually changes the way my credit situation impacts my life in the long run.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 7 |
Veteran, Non-Profit Worker (Denver, CO)
Age: 50 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- I'm skeptical about how this pilot will be rolled out and its effectiveness, as these things often overpromise.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Active Duty Coast Guard (Seattle, WA)
Age: 34 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 7/20
Statement of Opinion:
- If it lets us buy a home sooner without being penalized for prior debt issues, then I'm all for it.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 6 |
| Year 2 | 9 | 6 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Army Veteran, Freelance Designer (Phoenix, AZ)
Age: 29 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- Alternative credit metrics could make my life much less stressful. Every rejection because of thin credit feels like a unique failure.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 8 |
Active Duty Marine Corps (Houston, TX)
Age: 42 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- I hope this program is more than just another red-tape-filled process. It's hard enough balancing everything when leaving active duty.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Retired (Atlanta, GA)
Age: 65 | Gender: female
Wellbeing Before Policy: 9
Duration of Impact: 0.0 years
Commonness: 11/20
Statement of Opinion:
- This won't affect me much personally, but I'm glad to hear younger veterans will have better opportunities.
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 |
Cost Estimates
Year 1: $15000000 (Low: $10000000, High: $20000000)
Year 2: $10000000 (Low: $8000000, High: $15000000)
Year 3: $10000000 (Low: $8000000, High: $15000000)
Year 5: $5000000 (Low: $4000000, High: $10000000)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- Participation in the program is voluntary, which could limit scope and scale of impact.
- The effectiveness of alternative credit scoring models is crucial to program success.
- The pilot program needs comprehensive outreach to ensure awareness among eligible participants.