Higher costs for credit reporting in the mortgage industry are drawing renewed criticism from a federal housing official as the new year gets underway.

"I do not know what the credit bureaus are doing with their pricing. They are inviting a lot of scrutiny and that is only intensifying by the day," Federal Housing Finance Agency Director Bill Pulte said in one of the social media posts on X he uses to informally signal or test policy plans.

Pulte, who serves as the regulator and conservator for large government-sponsored enterprises that help fund and securitize many middle-class mortgages, appears to be restarting arguments over a relatively small cost in lending that's been magnified by relatively high fallout rates.

"We are in receipt of the Mortgage Bankers Association letter about concerns with the credit bureaus," he said, referring to a recent one that calls for flexibility in the GSEs' requirement to pay for reports from all "big three" providers if there is a strong score above 700.

Pulte, who also refers to the FHFA as US Federal Housing, suggests that the industry's message is "falling on deaf ears" and he will react by taking steps to "protect consumers."  

(Lenders generally price business costs into loans and borrowers directly pay report costs if the loan closes. The total costs of credit metrics used in lending comes both from the CRAs and score providers. FHFA has instituted measures aimed at increasing score provider competition.)

There has been debate between the mortgage industry and credit reporting agencies over whether the MBA's suggestion would open housing finance up to unacceptable risks or not. 

Credit reporting industry reactions to the MBA

The MBA has called for measures that would allow alternatives to the industry's standard merge of reports from all three major credit bureaus, which is at odds with practices in other consumer finance sectors. But it has been rebuffed based on CRA assertions of potential borrower harm.

While some studies have indicated allowing fewer credit reports wouldn't make a substantial difference, others draw an opposite conclusion and show concern about cherry-picking scores.

"More data, not less, is required to protect lenders and taxpayers and open up more opportunities for borrowers. The solution to bringing down costs for consumers isn't less data, it's greater choice," the Consumer Data Industry Association said in a statement last October.

The CDIA had not immediately responded to a more recent inquiry at the time of this writing.

The National Consumer Reporting Association, a group that represents credit report resellers, issued a similar statement in response to the MBA's letter in December.

"We know that there are material differences in the credit information," the group said in a LinkedIn post.

The average score differential is 29 points, according to a study by veteran industry economist Amy Crews Cutts that the NCRA cited.

The MBA's latest letter has suggested that containing the option to people with scores above 700, who typically have a stronger track record related to repaying debt than lower scores, limits the risk that not pulling all three reports could result in an incomplete picture of a borrower.

Renewed FHFA attention to DEI, builders

Another one of Pulte's recent posts renewed his advocacy for the Trump administration's stance against diversity, equity and inclusion initiatives.

Specifically, Pulte indicated this would be a consideration in FHFA's plans for a carrot-and-stick approach to working with builders to fulfill President Trump's plans to get construction companies to provide more access to a greater number of less expensive homes.

Pulte said in a post that "Fannie and Freddie's liquidity to builders should not be funding nonsense," a word he has used to describe diversity initiatives. The post was commenting on a HousingWire article related to how builders, like lenders, have repositioned DEI initiatives.

The Trump administration broadly engages in aggressive domestic and international policies, and some have drawn legal challenges. 

The National Fair Housing Alliance and other organizations have challenged anti-DEI initiatives in federal court on constitutional grounds.

The defendants have filed a motion to dismiss that federal district court case. The last filing in that case available at the time of this writing was an answer from the plaintiffs opposing that motion.