Griffith among House members voting to pass Middle-Class Borrower Protection Act of 2023

Jun. 28—U.S. Rep. Morgan Griffith, R-Va., says he backed a measure passed by the Republican-controlled House that would prevent the Biden administration from penalizing home-buyers with good credit.

H.R. 3564, also known as the Middle-Class Borrower Protection Act of 2023, passed the U.S. House by a vote of 230 to 189, Griffith's office said Tuesday. Fourteen Democrats joined majority Republicans in passing the measure in the House.

Griffith said Americans were stunned by Biden's new rule, which would penalize home-buyers with good credit and incentivize those with bad credit.

Griffith, who represents Virginia's 9th Congressional District in the U.S. House, said in the aftermath of the 2008 housing crisis, government-sponsored mortgage insurers (like Fannie Mae and Freddie Mac) began charging a one-time fee as a risk-based pricing tool to encourage responsible lending. However, the Biden administration created a new rule earlier this year updating how that fee was set.

"Much to the shock of most everyone, the new fee structure penalized those people with good credit and rewarded those people with not-so-good credit," Griffith said in his weekly media report. "Borrowers with good credit scores would be charged higher fees, while those with not-so-good credit scores would have their fees lowered."

Griffith said the Biden Administration expects those with higher credit to subsidize those who are a riskier bet.

Democrats argue the rule changes ensures equity among all borrowers, and will allow more Americans to have a chance at home ownership. But Griffith and other Republicans disagree with that assessment, particularly since some Americans have spent years building a good credit ranking in order to purchase a car or home.

"How does that make sense?," Griffith said of the rule change. "Why would we punish people for working hard to improve their credit score?"

The new Biden administration rule — if allowed to become law — would impact individuals seeking a mortgage for a potential home purchase.

The Democrat-controlled U.S. Senate has not yet taken up the Middle-Class Borrower Protection Act of 2023.

Mollie Timmons, communications director for Griffith, said the Senate would have to choose to take up H.R. 3564 — meaning they would consider and vote on it.

That has not yet occurred. Timmons said the House-passed bill has been sent to the Senate, and the House is still awaiting Senate action on it.

— Contact Charles Owens at cowens@bdtonline.com

— Contact Charles Owens at cowens@bdtonline.com. Follow him @BDTOwens