12 U.S.C. § 4548 — Regulations for use of credit scores

Page 1667 TITLE 12—BANKS AND BANKING § 4548 1 So in original. Probably should be followed by ‘‘as’’. antee of the timely payment of principal and interest on securities, notes, and other obli- gations based on or backed by mortgages on residential real properties designed prin- cipally for occupancy of from 1 to 4 families, consummated after December 23, 2011. (B) Amount The amount of the increase required under this section shall be determined by the Di- rector to appropriately reflect the risk of loss, as well 1 the cost of capital allocated to similar assets held by other fully private regulated financial institutions, but such amount shall be not less than an average in- crease of 10 basis points for each origination year or book year above the average fees im- posed in 2011 for such guarantees. The Direc- tor shall prohibit an enterprise from offset- ting the cost of the fee to mortgage origina- tors, borrowers, and investors by decreasing other charges, fees, or premiums, or in any other manner. (2) Authority to limit offer of guarantee The Director shall prohibit an enterprise from consummating any offer for a guarantee to a lender for mortgage-backed securities, if— (A) the guarantee is inconsistent with the requirements of this section; or (B) the risk of loss is allowed to increase, through lowering of the underwriting stand- ards or other means, for the primary purpose of meeting the requirements of this section. (3) Deposit in Treasury Amounts received from fee increases im- posed under this section shall be deposited di- rectly into the United States Treasury, and shall be available only to the extent provided in subsequent appropriations Acts. The fees charged pursuant to this section shall not be considered a reimbursement to the Federal Government for the costs or subsidy provided to an enterprise. (c) Phase-in (1) In general The Director may provide for compliance with subsection (b) by allowing each enter- prise to increase the guarantee fee charged by the enterprise gradually over the 2-year period beginning on December 23, 2011, in a manner sufficient to comply with this section. In de- termining a schedule for such increases, the Director shall— (A) provide for uniform pricing among lenders; (B) provide for adjustments in pricing based on risk levels; and (C) take into consideration conditions in financial markets. (2) Rule of construction Nothing in this subsection shall be inter- preted to undermine the minimum increase re- quired by subsection (b). (d) Information collection and annual analysis The Director shall require each enterprise to provide to the Director, as part of its annual re- port submitted to Congress— (1) a description of— (A) changes made to up-front fees and an- nual fees as part of the guarantee fees nego- tiated with lenders; (B) changes to the riskiness of the new borrowers compared to previous origination years or book years; and (C) any adjustments required to improve for future origination years or book years, in order to be in complete compliance with sub- section (b); and (2) an assessment of how the changes in the guarantee fees described in paragraph (1) met the requirements of subsection (b). (e) Enforcement (1) Required adjustments Based on the information from subsection (d) and any other information the Director deems necessary, the Director shall require an enterprise to make adjustments in its guar- antee fee in order to be in compliance with subsection (b). (2) Noncompliance penalty An enterprise that has been found to be out of compliance with subsection (b) for any 2 consecutive years shall be precluded from pro- viding any guarantee for a period, determined by rule of the Director, but in no case less than 1 year. (3) Rule of construction Nothing in this subsection shall be inter- preted as preventing the Director from initi- ating and implementing an enforcement ac- tion against an enterprise, at a time the Di- rector deems necessary, under other existing enforcement authority. (f) Expiration The provisions of this section shall expire on October 1, 2032. (Pub. L. 102–550, title XIII, § 1327, as added Pub. L. 112–78, title IV, § 401, Dec. 23, 2011, 125 Stat. 1287; Pub. L. 117–58, div. I, § 90005, Nov. 15, 2021, 135 Stat. 1346.) Editorial Notes PRIOR PROVISIONS A prior section 4547, Pub. L. 102–550, title XIII, § 1327, Oct. 28, 1992, 106 Stat. 3956; Pub. L. 110–289, div. A, title I, § 1122(a)(1), July 30, 2008, 122 Stat. 2689, related to au- thority to require reports by enterprises, prior to re- peal by Pub. L. 110–289, div. A , title I, § 1104(b), July 30, 2008, 122 Stat. 2667. AMENDMENTS 2021—Subsec. (f). Pub. L. 117–58 substituted ‘‘2032’’ for ‘‘2021’’. § 4548. Regulations for use of credit scores The Director shall— (1) by regulation, establish standards and criteria for any process used by an enterprise to validate and approve credit scoring models pursuant to section 1717(b)(7) of this title and section 1454(d) of this title; and (2) ensure that any credit scoring model that is validated and approved by an enterprise under section 1717(b)(7) of this title or section Page 1668 TITLE 12—BANKS AND BANKING § 4561 1 So in original. 1454(d) of this title meets the requirements of clauses (i), (ii), and (iii) of section 1717(b)(7)(C) of this title and subparagraphs (A), (B), and (C) of section 1454(d) of this title, respectively. (Pub. L. 102–550, title XIII, § 1328, as added Pub. L. 115–174, title III, § 310(c), May 24, 2018, 132 Stat. 1355.) Editorial Notes PRIOR PROVISIONS A prior section 4548, Pub. L. 102–550, title XIII, § 1328, Oct. 28, 1992, 106 Stat. 3956; Pub. L. 110–289, div. A, title I, § 1122(a)(1), July 30, 2008, 122 Stat. 2689, related to re- quired annual reports, prior to repeal by Pub. L. 110–289, div. A , title I, § 1104(b), July 30, 2008, 122 Stat. 2667. SUBPART 2—HOUSING GOALS § 4561. Establishment of housing goals (a) In general The Director shall, by regulation, establish ef- fective for 2010 and each year thereafter, annual housing goals, with respect to the mortgage pur- chases by the enterprises, as follows: (1) Single-family housing goals Four single-family housing goals under sec- tion 4562 of this title. (2) Multifamily special affordable housing goal One multifamily special affordable housing goal under section 4563 of this title. (b) Timing The Director shall, by regulation, establish an annual deadline by which the Director shall es- tablish the annual housing goals under this sub- part for each year, taking into consideration the need for the enterprises to reasonably and suffi- ciently plan their operations and activities in advance, including operations and activities necessary to meet such annual goals. (c) Transition The annual housing goals effective for 2008 pursuant to this subpart, as in effect before July 30, 2008, shall remain in effect for 2009, except that not later than the expiration of the 270-day period beginning on July 30, 2008, the Director shall review such goals applicable for 2009 to de- termine the feasibility of such goals given the market conditions current at such time and, after seeking public comment for a period not to exceed 30 days, may make appropriate adjust- ments consistent with such market conditions. (d) Eliminating interest rate disparities (1) In general Upon request by the Director, an enterprise shall provide to the Director, in a form deter- mined by the Director, data the Director may review to determine whether there exist dis- parities in interest rates charged on mort- gages to borrowers who are minorities as com- pared with comparable mortgages to bor- rowers of similar creditworthiness who are not minorities. (2) Remedial actions upon preliminary finding Upon a preliminary finding by the Director that a pattern of disparities in interest rates with respect to any lender or lenders exists pursuant to the data provided by an enterprise in paragraph (1), the Director shalll1 (A) refer the preliminary finding to the ap- propriate regulatory or enforcement agency for further review; and (B) require the enterprise to submit addi- tional data with respect to any lender or lenders, as appropriate and to the extent practicable, to the Director who shall sub- mit any such additional data to the regu- latory or enforcement agency for appro- priate action. (3) Annual report to Congress The Director shall submit to the Committee on Financial Services of the House of Rep- resentatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a re- port describing the actions taken, and being taken, by the Director to carry out this sub- section. No such report shall identify any lender or lenders who have not been found to have engaged in discriminatory lending prac- tices pursuant to a final adjudication on the record, and after opportunity for an adminis- trative hearing, in accordance with subchapter II of chapter 5 of title 5. (4) Protection of identity of individuals In carrying out this subsection, the Director shall ensure that no property-related or finan- cial information that would enable a borrower to be identified shall be made public. (Pub. L. 102–550, title XIII, § 1331, as added Pub. L. 110–289, div. A, title I, § 1128(b), July 30, 2008, 122 Stat. 2696.) Editorial Notes PRIOR PROVISIONS A prior section 4561, Pub. L. 102–550, title XIII, § 1331, Oct. 28, 1992, 106 Stat. 3956, related to establishment of housing goals, prior to repeal by Pub. L. 110–289, div. A, title I, § 1128(a), July 30, 2008, 122 Stat. 2696. § 4562. Single-family housing goals (a) In general The Director shall, by regulation, establish annual goals for the purchase by each enterprise of the following types of mortgages for the fol- lowing categories of families: (1) Purchase-money mortgages A goal for purchase of conventional, con- forming, single-family, purchase money mort- gages financing owner-occupied housing for each of the following categories of families: (A) Low-income families. (B) Families that reside in low-income areas. (C) Very low-income families. (2) Refinancing mortgages A goal for purchase of conventional, con- forming mortgages on owner-occupied, single- family housing for low-income families that are given to pay off or prepay an existing loan secured by the same property.