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TransUnion Supports Legislation to Preserve the Tri-Merge

US Capitol Building

FHFA’s proposed shift from a tri-merge to a bi-merge is on hold until 2025, but Congress is taking action now to address the proposal and preserve the tri-merge for future homebuyers. Congressman Scott Fitzgerald has introduced the Accurate Credit for Homebuyers action, a bill that aims to codify the tri-merge credit report in law.

The legislation emerged in light of the Federal Housing Finance Administration’s proposal to require the use of two credit bureaus (bi-merge) instead of three (tri-merge) to determine a borrower’s effective credit score when applying for a mortgage.  Critics are increasingly voicing concerns about the potential, inadvertent harm that might emerge as a result of the transition to a bi-merge.

TransUnion research has showed that a bi-merge could cause otherwise creditworthy consumers to pay higher interest on their mortgages, or even become unscorable. Likewise, affordability miscalculations and insufficient risk coverage could introduce billions of dollars in risk that other borrowers or U.S. taxpayers have to shoulder.

In addition to Rep. Fitzgerald’s legislation, Representatives Ritchie Torres and Young Kim introduced legislation to “require the Director of the Federal Housing Finance Agency to assess the costs and benefits.” This bipartisan interest is just the latest in an increasingly loud chorus of concerns.

Allison Shuster, TransUnion’s Head of U.S. Government Relations had this to say:

“These bills reflect growing recognition that the current tri-merge credit reporting system provides consumers with the most access to mortgages, while preserving the safety and soundness of the mortgage ecosystem. We thank Representatives Fitzgerald, Torres and Kim for their leadership on this important issue and look forward to working with legislators and regulators to support homebuyers in a challenging housing market.”

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