The debate over housing affordability has exposed a growing fault line within conservative policy circles. On one side is a genuine desire to lower costs and expand access to homeownership. On the other is a dangerous temptation to confuse cost cutting optics with structural reform. The latest proposal to dismantle the tri-merge credit reporting standard falls squarely into the latter category.
The exchange began with a critique of the 30-year mortgage as a government constructed financial instrument that inflates home prices, accelerates wealth extraction through interest, and distorts what is often described as the American Dream. The Mortgage Bankers Association first responded by defending the product as a stabilizing bridge from renting to owning. Now, the argument has shifted again. This time, MBA President Bob Broeksmit claims the real culprit is not the mortgage itself but the credit reporting framework behind it. His solution is to end the tri-merge requirement and move toward a single-file credit report model for certain loans, all in the name of affordability and competition.
Those words deserve careful scrutiny, because affordability and competition are being used to justify a change that would weaken underwriting integrity, increase market volatility, and ultimately raise costs for the very households policymakers claim to be helping.
Housing affordability is not an abstract concern. It is the defining cost of living crisis facing young and working families. Conservatives are right to ask why a system designed to expand ownership has instead entrenched institutional profit and financial fragility. They are also right to challenge corporations and protected rents wherever they exist. But housing finance is not an area where superficial efficiencies produce durable gains. In a system this leveraged, long dated, and federally backstopped, small informational errors scale quickly and widely.
That is the core problem with the case against tri-merge. It treats the credit reporting standard as just another line item in the closing stack, rather than what it actually is: a stability mechanism in a system already prone to distortion.
The tri-merge standard exists for a reason. Mortgage lending is uniquely sensitive to information quality. Loans are large, highly leveraged, and typically held or guaranteed by government-backed entities. Underwriting decisions do not just affect individual borrowers. They shape loan pools, secondary market pricing, and taxpayer exposure. When information quality deteriorates, risk does not stay isolated. It spreads.
In the real economy, credit data is fragmented. Not all tradelines appear on all three bureaus. Fintech loans and buy now pay later accounts can be missing. Community bank lines often appear inconsistently. This is not a failure of any single bureau. It is a reflection of a complex and evolving credit ecosystem. Reducing the number of reports used in underwriting does not solve that problem. It amplifies it by increasing the probability that meaningful data disappears from view.
That disappearance has consequences. It affects eligibility. It affects pricing. It affects risk layering. It affects how loans perform once they are securitized and sold. This is why tri-merge has long been the standard in mortgage underwriting. Not because lenders enjoy paying for three reports, but because the cost of missing information in this market is far greater than the cost of redundancy.
The conservative media coverage cited throughout this debate has been clear on this point. Newsmax warned that mortgage savings can be costly, emphasizing that even small score distortions can push borrowers into higher priced loans and increase lifetime interest burdens. Research cited there suggests removing one credit report can shift a borrower’s score by as much as 45 points. That is not marginal. It is often the difference between qualifying and not qualifying, or between prime pricing and punitive rates.
The Washington Examiner reached a similar conclusion, calling the move to bi-merge a risky experiment that increases the chance of both unjust denials and reckless approvals. Analysis cited there indicates that more than 1.7 million borrowers who would not qualify under tri-merge could be approved under bi-merge. That figure is often framed as expanded access. A more honest interpretation is weaker risk controls and a higher probability of defaults that eventually feed back into tighter credit and higher rates. This impact would only be that much worse if the MBA’s recommended single-file credit report model was adopted.
Townhall added a critical distributional insight. For borrowers with thick, established credit files, the framework often makes little difference. For young and working-class households with thin or emerging credit, it makes all the difference. Those are also the borrowers most likely to benefit from reforms like rent reporting, which FHFA Director Bill Pulte recently announced would be allowed to help determine who qualifies for a mortgage. But rent reporting only works if the underlying credit framework reliably captures that data. Fewer bureaus reporting means a higher chance that rent history disappears entirely, turning a promised reform into a dead end.
Broeksmit’s argument is more nuanced than a simple attack. He frames the issue as one of competition, pointing to the long-standing dominance of FICO and scrutinizing cost markups. It is true that score competition is healthy. Transparency around fees and performance is necessary.
But competition in scoring does not require weakening the reporting inputs. In fact, tri-merge makes score competition more meaningful by ensuring models are evaluated on predictive performance rather than on which bureau happened to have more of a borrower’s financial life in its database.
This is where the argument collapses under its own weight. Broeksmit alleges that meaningful public debate is constrained by nondisclosure agreements, then asks policymakers to trust private analyses conducted by his members while dismissing the public warnings of others. That is not market transparency. It is a request for deference without evidence. You do not overhaul the informational foundation of mortgage underwriting based on data the public cannot examine.
A serious conservative approach would start from the opposite premise. Preserve tri-merge as the baseline. Ensure transparency on bureau performance, data gaps, and pricing. Require FHFA, Fannie Mae, and Freddie Mac to refresh and publish their analyses of single, bi, and tri-merge frameworks using current data, to assess evidence rather than slogans.
There is also a broader lesson conservatives should not ignore. Markets do not become cheaper when risk rises. They become more expensive. When underwriting reliability declines, investors demand a premium. That premium shows up as higher rates, tighter credit, and higher costs across the board. What is marketed as a cost saving becomes a cost increase, and affordability worsens rather than improves.
The same pattern appeared in the defense of the 30-year mortgage itself. Stability and access were emphasized, while the structural price inflation created by subsidized long duration debt was ignored. Now, the inverse move is being made. Costs and markups are highlighted, while the stabilizing role of tri-merge is minimized. In both cases, the analysis stops one step short of the system-level effects.
None of this absolves the credit reporting industry of scrutiny, but dismantling tri-merge is not reform. It is risk redistribution disguised as efficiency.
Housing affordability will not be solved by removing underwriting guardrails and calling it competition. It will be solved by reforms that increase accuracy, reduce volatility, and expand access in ways that endure. Reducing a small fee today at the cost of higher rates, more denials, or more defaults tomorrow is not reform. It is a talking point with a delayed bill.
Housing is too expensive, and the mortgage system too entangled with federal backstops, to get this wrong. When underwriting inputs fail, the consequences are never private. They are shared by borrowers, investors, and taxpayers alike. Tri-merge is not the source of America’s housing inflation. It is one of the few remaining guardrails in a system already stretched to its limits.