To require the Bureau of Consumer Financial Protection and the Federal Trade Commission to conduct a study on use of additional key factors in credit scoring models, and for other purposes.
Summary
H.R. 5083 directs the Bureau of Consumer Financial Protection (BCFP) and the Federal Trade Commission (FTC) to conduct a study on the use of additional key factors in credit scoring models. The study will investigate how these factors, such as brokerage account statements, rental payment history, and utility payment history, affect creditworthiness evaluations. A report summarizing the findings must be submitted to Congress by December 31, 2025.
Expected Effects
The study could lead to changes in how credit scores are calculated, potentially benefiting consumers with limited traditional credit history. It may also influence future legislation or regulations related to credit scoring and consumer protection. The results could inform policy decisions regarding the inclusion of alternative data in credit assessments.
Potential Benefits
- Could broaden access to credit for individuals with limited credit history.
- May provide a more accurate and comprehensive assessment of creditworthiness.
- Could encourage the use of more inclusive credit scoring models.
- May identify potential biases or discriminatory practices in existing credit scoring models.
- Could inform future policy decisions related to credit scoring and consumer protection.
Most Benefited Areas:
Potential Disadvantages
- The study itself may not lead to immediate changes in credit scoring practices.
- The inclusion of additional factors could potentially introduce new forms of bias or discrimination.
- There may be privacy concerns associated with the collection and use of some of the key factors.
- The study's findings may be subject to interpretation and debate.
- The implementation of new credit scoring models could be costly and time-consuming.
Constitutional Alignment
The bill aligns with the Commerce Clause (Article I, Section 8, Clause 3) by regulating activities that affect interstate commerce, such as credit scoring. The requirement for a study by the BCFP and FTC falls under Congress's power to oversee and regulate economic activities. There are no apparent conflicts with individual rights or freedoms guaranteed by the Constitution.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).