The debate over whether Fannie Mae and Freddie Mac should allow mortgage lenders to use a single credit report instead of the traditional “tri-merge” framework has spilled into the editorial pages of The Wall Street Journal.
In a letter to the editor, Mortgage Bankers Association President and CEO Bob Broeksmit argued that the tri-merge requirement — which pulls data from TransUnion, Equifax and Experian — is an expensive anachronism, reiterating his previous stance.
The MBA leader stated that the cost of an individual credit report has skyrocketed by approximately 400% since 2021. The trade group contends that by mandating reports from all three bureaus, the government has allowed them to raise prices without facing competition.
In a piece published March 24, The Wall Street Journal’s editorial board heavily criticized the single-report idea, citing American Enterprise Institute (AEI) research to warn it could incentivize lenders to engage in “score shopping.”
The board argued that because late payments or new credit lines may only appear on one bureau’s report, dropping the tri-merge framework could mask credit blemishes. The Journal pointed out that a typical tri-merge report costs between $80 and $100, which accounts for less than 1% of the cost of originating a mortgage.
Interestingly, both sides are using research from AEI to support their arguments. The Journal cited an AEI report showing that while score differences across the three bureaus average 26 points for prime borrowers, the discrepancy for subprime borrowers can exceed 80 points. Because Fannie Mae and Freddie Mac charge less to back mortgages for higher-score borrowers, the Journal argued lenders could cherry-pick the most favorable score to secure lower rates for riskier borrowers, shifting default risks onto taxpayers.
Broeksmit pushed back against this narrative in his rebuttal published Wednesday, stating that the MBA’s proposal explicitly guards against a return to subprime lending. He explained the MBA is only calling for the optional use of a single credit report if the borrower’s initial credit pull has a score of at least 700. The organization still supports the traditional three-report requirement for higher-risk loans to protect taxpayers.
The MBA president highlighted that 80% of the loans backed by Fannie and Freddie have credit scores over 720. Additionally, he referenced AEI research indicating that individual bureau scores predict default risk just as well as the tri-merge model, adding that implementing a rule like randomly selecting a single bureau’s score would successfully prevent lenders from gaming the system.
For mortgage originators, this debate occurs against a backdrop of shifting underwriting standards. The Journal’s editorial board framed the single-report proposal as part of a broader easing of standards, noting that Fannie Mae dropped its minimum 620 credit score requirement in November for loans submitted through its Desktop Underwriter system, and that the share of new borrowers with debt-to-income ratios above 43% has doubled over the past decade to 36%.
