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Specifically, the group sent a letter to the Federal Housing Finance Agency that oversees the two government-sponsored enterprises, asking it to add the new VantageScore first, following
"One way to achieve a slower implementation schedule would be to take more incremental steps, by starting with VantageScore, the new entrant in this space. CHLA recommends that the FICO 10T requirement be deferred to a later phase," the association said in the letter.
That could be done depending on how interconnected VantageScore will be with other changes the FHFA, Fannie and Freddie are planning, said Tony Hutchinson, senior vice president of industry and government relations at VantageScore Solutions.
"If the FHFA is saying they want to utilize VantageScore along with some of the new rules that are going to come out …then they're going to have to wait until those rules are promulgated," he said.
FICO declined to comment on an inquiry about the CHLA letter. However, in a previous interview, a representative noted the three major credit reporting agencies, who share ownership of VantageScore but operate independent from it, largely control score pricing.
"FICO doesn't set the price of the FICO score in the market. We provide a royalty rate card that we give to the CRAs, and then they can choose to price the FICO score any way they want in the market," said Joanne Gaskin, vice president of scores and data analytics.
VantageScore also declined to comment on how its pricing compares to FICO's, deferring to the credit bureaus. FICO and at least one of the credit bureaus have confirmed a change in pricing and said as reflects inflation they hadn't revised their prices to reflect in some time.
In its letter, the association also reiterated concerns with what is reportedly bulk pricing for the credit bundles that include the current FICO score required to sell mortgages to Fannie and Freddie.
Such pricing is out of step with "at least the spirit" of guarantee fee parity, the CHLA said in the letter sent Thursday to FHFA Director Sandra Thompson.
G-fee parity refers to historical concerns with larger lenders receiving more favorable terms for the loans the two GSEs buy in the past. This led to Fannie and Freddie making efforts to ensure smaller players receive pricing more on par with their larger counterparts.
Freddie and Fannie don't directly control pricing for credit measures but their requirements essentially compel the lenders they work with to invest in certain consumer scores and reports as sales to the GSEs are contingent on submission of that information.
Lenders don't have to sell to Fannie and Freddie, but the two GSEs currently play such a large role in the U.S. mortgage market that it can be challenging not to rely on them, particularly at nonbanks that typically don't hold loans in portfolio.
The newer credit score models Freddie and Fannie are moving toward were designed to incorporate broader ranges of borrower data than the older model currently used, potentially qualifying a more expansive group of borrowers for mortgages and homeownership.
