The House Financial Services Subcommittee on Financial Institutions and Consumer Credit took a hard look at access to credit this week with a hearing titled “Examining Legislative Proposals to Address Consumer Access to Mainstream Banking Services.”
Of particular interest to the National Association of Realtors® was discussion of two NAR-backed bills that seek to open the credit box to more potential borrowers.
“It’s encouraging to see the House Financial Services Committee taking a hard look at some of the factors that limit access to credit,” said NAR President Tom Salomone. “There’s no question that strong borrowers are being left behind, and too often it’s low-income, rural and minority borrowers who feel the effects.”
Salomone referenced discussions that took place as part of an NAR credit symposium, where academics, members of congress, and industry leaders came together to discuss ways that strong buyers were being kept from mortgage credit markets.
NAR has looked at a number of potential fixes, including expanding ways for individuals with “thin” credit files to build credit and changing certain credit scoring models to factor in years of on-time rent payments when considering a credit score.
Doing so could potentially make mortgage credit a possibility for strong borrowers who are currently locked out of the market.
“We can do more to put homeownership in reach while still upholding responsible lending standards, and we’re hoping to see that addressed in the months ahead,” Salomone said.