Skip to main content

Federal Housing Finance Agency—Applicability of the Congressional Review Act to FHFA Bi-Merge Requirement and Determination on Two New Credit Score Models

Skip to Highlights

Highlights

The Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac (the Enterprises) to require lenders to deliver credit reports from any two of the three nationwide consumer reporting agencies ("bi-merge requirement") for single family loans the Enterprises acquire. The bi-merge requirement replaced the requirement for lenders to provide credit reports from all three consumer reporting agencies ("tri-merge requirement").

The Congressional Review Act (CRA) adopts the definition of "rule" under the Administrative Procedure Act (APA) but excludes certain categories of rules from coverage. CRA requires that before a rule can take effect, an agency must submit a report on the rule to each house of Congress as well as the Comptroller General, and it provides procedures for congressional review where Congress may disapprove of rules. FHFA directed the Enterprises to change the credit reporting requirements in its capacity as a conservator of the Enterprises. When FHFA acts as conservator, it ceases operating as an agency as defined by APA and its actions are not agency statements, so they do not meet the APA definition of a rule. Therefore, FHFA's direction to replace the tri-merge requirement with the bi-merge requirement is not subject to CRA's submission requirements.

In addition, FHFA approved the Enterprises' determination to approve two new credit score models. APA's definition of a rule does not include orders, so they are not subject to CRA. FHFA's approval of these determinations falls within the APA's definition of an order, and is not subject to CRA's submission requirements.

View Decision

Downloads

GAO Contacts

Shirley A. Jones
Managing Associate General Counsel
Office of the General Counsel

Media Inquiries

Sarah Kaczmarek
Managing Director
Office of Public Affairs

Public Inquiries