H.R. 5083: To require the Bureau of Consumer Financial Protection and the Federal Trade Commission to conduct a study on use of additional key factors in credit scoring models, and for other purposes.

This bill requires the Bureau of Consumer Financial Protection (CFPB) and the Federal Trade Commission (FTC) to conduct a study on the use of additional factors in credit scoring models and submit a report to Congress by December 31, 2025. The study will focus on how these new factors might be integrated into assessing the creditworthiness of consumers.

Key Provisions of the Bill

• The CFPB Director and FTC Chairman are tasked with preparing a report on the effectiveness of credit scoring models that utilize additional factors.
• The report will investigate how these models influence creditors' evaluations of a consumer's creditworthiness.

Additional Key Factors

The study will specifically consider several key factors for inclusion in credit scoring, including:

• Brokerage account statements
• Payment history for installment contracts, such as those for "Buy Now, Pay Later" programs
• Transaction records from the Electronic Benefit Transfer system
• Rental payment history
• Utility payment history
• Telecommunication and subscription service payment history
• Transaction data from banks and credit unions
• Payroll deposit frequency data
• Payment history for insurance products
• Public records related to property, business licenses, and court filings
• Peer-to-peer financial transaction activity

Definitions

The bill defines:

• Credit scoring model: A system used to calculate a consumer's credit score based on various financial data.
• Key factor: Specific elements that impact the development of a consumer's credit score, as established by existing consumer credit laws.

Purpose of the Study

The intent of the study is to explore the potential benefits and impacts of integrating these additional key factors into credit scoring systems, which could lead to more comprehensive assessments of an individual's creditworthiness.

Implications

This bill could lead to changes in how credit scores are calculated, which may improve access to credit for some consumers and alter the risk assessments conducted by lenders.

Relevant Companies

• PYPL - PayPal Holdings, Inc.: May be affected as it is involved in peer-to-peer transactions and various payment structures, which could relate to the bill's focus on peer-to-peer financial activities.
• BBY - Best Buy Co., Inc.: Could be influenced through its financing options, including "Buy Now, Pay Later" contracts.