Harvest, a fintech founded by Nami Baral, has developed an alternative scoring method that amasses data on spending patterns, debt payments and even earnings potential to get a better sense of consumers' creditworthiness.
The regulator of the government-sponsored enterprises retreated from an earlier proposal that had barred VantageScore because of its ties to the credit bureaus.
The Federal Housing Finance Agency has proposed barring Fannie Mae and Freddie Mac from using credit scores developed by VantageScore over concern about conflicts of interest with the joint venture of Equifax, Experian and TransUnion.
The Federal Housing Finance Agency is suspending its ongoing review of new credit scoring models and will instead move forward with creating a regulatory framework for providers of alternative credit scores to apply and be evaluated for use by Fannie Mae and Freddie Mac.
The annual progress report on the Fannie Mae and Freddie Mac conservatorships reiterated that a new credit score model will likely not be operational until after the implementation of a new Single Security Initiative.
A late addition to regulatory relief legislation would direct the Federal Housing Finance Agency to review credit-scoring alternatives, but some say the provision is redundant.
The Federal Housing Finance Agency said Friday it will give commenters more time to weigh in on a potential update to the credit scoring requirements for Fannie Mae and Freddie Mac.
