Expanding Access to Credit through Consumer-Permissioned Data Act

The "Expanding Access to Credit through Consumer-Permissioned Data Act" amends the Equal Credit Opportunity Act to require mortgage creditors to consider alternative credit information. This aims to increase access to mortgage loans for individuals, particularly low-income consumers, younger consumers, and people of color, who may have limited or no traditional credit history. The bill recognizes that approximately 32 million consumers lack sufficient credit history with national reporting agencies, and that using alternative data can help lenders meet Community Reinvestment Act goals. Under the bill, if an applicant requests and authorizes it, and states that traditional credit reports do not fully reflect their creditworthiness, creditors must consider additional credit information. This includes data like bank statement information or rental payment history, provided it relates to information the creditor would typically consider. Creditors are mandated to treat this consumer-permissioned data with the same weight and consideration as information from traditional consumer reporting agencies, unless it is found to be a material misrepresentation. Furthermore, the legislation requires creditors to provide applicants with a clear notice explaining their right to submit this alternative credit information, detailing its potential benefits, and outlining conditions under which it might be disregarded. These notices must be available in the eight most commonly spoken languages for individuals with limited English proficiency, with standardized language developed by the Bureau of Consumer Financial Protection (CFPB). The bill also stipulates that all mortgage underwriting systems, including those used by federal agencies, must comply with these new requirements, and the CFPB is tasked with issuing final rules within 18 months to implement these provisions.