Sponsor
Cleo Fields
Representative · D-LA
Representative · D-LA
The bill could expand fairer access to credit and produce useful regulatory guidance by evaluating alternative data, but it risks normalizing use of highly sensitive consumer information and increasing privacy, discrimination, and cost harms unless strong safeguards and careful modeling are adopted.
Thin-file and unbanked consumers could gain fairer access to credit if the report shows alternative data (rental, utility, payroll, buy‑now‑pay‑later, P2P) improves credit assessments.
Low-income consumers and others could receive stronger privacy protections if the study identifies risks from using sensitive data (EBT, payroll deposits, brokerage statements) in scoring.
Regulators and the financial industry can get actionable guidance from a joint CFPB–FTC study, improving transparency around credit scoring practices and how alternative data are used.
Low-income individuals could face greater discrimination if examining EBT and payroll data normalizes inclusion of highly sensitive income and benefits information in lending decisions.
Consumers (especially low-income households) and taxpayers face increased privacy and data‑security risks from collecting and analyzing broad transaction and P2P data unless the study drives strict safeguards.
Middle‑class and low‑income borrowers might see higher borrowing costs if expanded use of alternative data leads models to misinterpret stable but nontraditional cash flows as greater risk.
Based on analysis of 2 sections of legislative text.
Requires CFPB and FTC to jointly study and report by Dec 31, 2025 on credit scoring models that use specified alternative data and their effect on creditor evaluations.
Official title: 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.
Introduced September 2, 2025 by Cleo Fields · Last progress September 2, 2025
Requires the CFPB Director and FTC Chairman to submit a joint report to Congress by December 31, 2025, studying credit scoring models that use certain specified "key factors" (alternative data) and how those models affect creditor assessments of consumer creditworthiness. The report must analyze models defined by existing law and examine factors such as brokerage statements, buy‑now‑pay‑later installment history, EBT transactions, rental and utility payments, payroll/depository transaction patterns, insurance payment history, public record data, peer‑to‑peer activity, and depository transaction data.