The push by the Mortgage Bankers Association (MBA) for a single-file credit report framework has received support from the Broker Action Coalition (BAC), which recently urged Bill Pulte, director of the Federal Housing Finance Agency (FHFA), “to prioritize this issue and work with industry stakeholders to modernize credit report practices.”
The Feb. 6 letter to Pulte, which BAC Chief Advocacy Officer Brendan McKay shared Monday on LinkedIn, lamented the cost increases to consumers for credit reporting, which the Consumer Financial Protection Bureau reported in 2024 had surged by up to 400% in recent years, significantly affecting homebuyers’ upfront expenses.
McKay confirmed in an email to Scotsman Guide that his group supports the MBA’s credit reform proposal “to enhance competition and reduce costs without compromising safety.”
“It may not solve every aspect of the problem the credit report industry has created, and could introduce new challenges, but it is a net positive,” McKay commented. “We believe many of the potential issues raised can be solved, and the proposal deserves further discussion. Most importantly, it represents the first tangible, implementable step toward curbing unchecked credit bureau costs and shifting the conversation from simply complaining to actually solving the problem.”
The FHFA, which regulates government-sponsored enterprises Fannie Mae and Freddie Mac, currently requires a tri-merge credit report for loans eligible for purchase by the GSEs, meaning it pulls consumer data from all three of the primary credit bureaus: Equifax, Experian and TransUnion.
The MBA’s plan calls for phasing out tri-merge credit score requirements in mortgage underwriting in favor of a single-bureau framework for borrowers with an initial credit pull above 700. The MBA believes a single-file framework would introduce competition into the credit scoring landscape that would drive down loan production costs and lower fees to borrowers.
That proposal has received pushback from some industry participants, including the Community Home Lenders of America, which argues that it could ultimately raise borrowing costs for consumers through increased risk premiums in loan pricing.
BAC’s proposal would authorize a single- or dual-merge system “as an immediate cost-containment measure,” the letter states. It also strongly encourages FHFA to pursue a consumer-controlled, portable credit report model to allow borrowers to authorize the use of a single report across multiple lenders as a way to reduce costs.
A trade association that represents the credit bureaus, the Consumer Data Industry Association (CDIA), has been critical of the MBA’s proposal. Dan Smith, CDIA’s president and CEO, didn’t change his opinion in an email to Scotsman Guide after BAC’s announcement of support.
“The tri-merge credit report exists for a reason; it promotes data accuracy, market competition and investor confidence,” Smith stated. “Eliminating it undermines investor confidence, shifts risk to borrowers, investors and taxpayers, and erodes the integrity of the credit reporting system.”
He continued: “Purported benefits of a move to single-pull are unproven, and numerous studies do not support MBA’s claims.”
BAC’s support for the MBA’s proposal follows the release of documents that showed Fannie Mae and Freddie Mac had concerns dating back to 2022 about the accuracy of using a single-file report.
Bob Broeksmit, the MBA’s president and CEO, testified last Wednesday before the House Subcommittee on Housing and Insurance, reiterating his position that the tri-merge requirement should be eliminated.
“A single-file framework promotes beneficial competition in the credit reporting space, encourages innovation, streamlines origination processes and reduces borrower and lender costs that have seen dramatic increases in recent years,” Broeksmit told the committee.
The MBA relayed to Scotsman Guide that it is aware of and appreciates BAC’s support. The FHFA had not replied to a request for comment at the time of publication.
