Bill Pulte took to social media this week to say the Federal Housing Finance Agency (FHFA) is “seriously considering” the adoption of a bi-merge credit report while also “studying” the usage of just one credit report to reduce costs for borrowers.
“Equifax, Experian, and TransUnion have been overcharging Americans for far too long. This will end soon. We are seriously considering bi-merge, and stronger solutions (SAFER and SOUNDER). We will not allow companies to take advantage of American consumers. No more,” Pulte wrote on social media on Thursday.
In a post on Friday, he added that the FHFA is “also studying the usage of just one credit report to bring even more savings than we already have to American consumers.”
Spokespersons for the three credit bureaus did not immediately reply to HousingWire’s request for comment.
A bi-merge option was on the table during the Biden administration when the FHFA was run by Sandra Thompson, but it was delayed due to implementation challenges.
Recently, some players in the industry have defended the use of a single-file option, with the Mortgage Bankers Association (MBA) being the most vocal supporter of the idea.
The trade group argues that a single pull would encourage more predictive credit data and reduce systemwide costs without materially increasing risk in some cases. Meanwhile, opponents counter that the tri-merge model protects borrowers by revealing errors or missing data across bureaus and avoiding “gaming.”
A spokesperson for FICO, which competes against the bureaus and their VantageScore joint venture, issued a statement to HousingWire following Pulte’s comments.
“FICO supports Director Pulte’s commitment to foster a competitive environment that is based on performance, trusted analytics, and outcomes for borrowers, lenders, and investors. FICO Score 10T is the most predictive credit score available today, leveraging trended and rental credit data to enable more accurate risk assessment and better lending decisions,” the statement read.
“As the industry continues to modernize, we anticipate FICO Score 10T will be implemented across the market to help expand sustainable homeownership opportunities and further competition, while maintaining the safety and soundness of the housing finance system.”
Impact to homeownership opportunities
MBA president and CEO Bob Broeksmit said the trade group supports “ending the tri-merge requirement and moving to a single-file approach for borrowers with strong credit profiles, which would further promote competition and reduce costs for consumers.”
“These important updates will give lenders greater flexibility, enable more consumers to be scored accurately, and expand sustainable access to homeownership,” Broeksmit said.
According to Pulte, the FHFA has “asked the CEOs of the Credit Bureaus for solutions but they seem more intent on ‘happy talk,’ tapping us along with meetings, and operating as ‘cartel-like,’ which is not in the best interest of American homeowners.”
“With the advent of AI, the credit bureaus of your grandparent’s time will not be the credit bureaus of our time,” Pulte said on social media. “Data is more accessible than ever, and technology, especially in President Trump’s America, is stronger than ever.”
Extended timeline for VS 4.0 acceptance
Pulte also announced an extension for the acceptance of VantageScore 4.0 through all lenders as an alternative to Classic FICO.
“Since 2020, FICO has increased the price per a person’s credit score by 1,800%. FICO has enjoyed a monopoly. No more,” Pulte said. “Fannie and Freddie’s initial rollout of VantageScore has been incredibly successful, with 50 LENDERS DELIVERING LOANS. So, EFFECTIVE IMMEDIATELY, I’m instructing Fannie and Freddie to approve ALL lenders to use VantageScore.”
An analysis published last month by Keefe, Bruyette & Woods showed that the monthly volume of VantageScore loans remained low but spiked sharply in July to 4.4% of the total.
“While the overall penetration rate has continued to increase based on the mid-August snapshot data, adoption is highly concentrated with almost all VS4 volume coming from Rocket and United Wholesale Mortgage,” the KBW analysis explained. “We believe that VantageScore is currently being seen as a way to potentially broaden the mortgage market as opposed to a way to cut costs, so we believe most lenders are still pulling FICO scores for almost all loans.”
The Community Home Lenders of America (CHLA) commended the expansion of VantageScore 4.0 acceptance.
“This is a decisive action to increase competition and save mortgage borrowers money, in the face of a credit score market in which FICO has too long had a monopoly,” said Rob Zimmer, CHLA’s director of external affairs.
Editor’s note: This story was updated with comments from FICO.