FHFA’s proposed approach to alternative credit scores complies with new law by opening the door to FICO options and then uses regulatory discretion to slam it shut again on any of the alternatives developed by the credit bureaus or, for that matter, anyone who even likes one. As a result, the GSE automated underwriting systems (AUS) models reign supreme as would any alternative that institutions or fintechs might come to develop that the GSEs might select under the tough process established in the NPR.
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