The Law of Unintended Consequences
By Senator Loren Lippincott
Here in Nebraska, we’ve always believed in taking a careful, commonsense approach. Whether it’s raising a crop, running a business, or passing a law, we know that even small decisions can have big consequences.
Right now, our state is facing some real challenges, like the cost of housing, lack of childcare, and a workforce stretched too thin. None of these problems have quick fixes, but we’ve made progress by doing what Nebraskans do best: rolling up our sleeves and working together to find practical, local solutions that work for our communities.
These challenges aren’t just policy points – they affect the heartbeat of our local communities, places like my hometown, Central City, or to the far ends of our state. When housing is too expensive or workers are too hard to find, it’s not just an economic problem – it becomes even larger than that. Workers move away, main streets go quiet, and towns can lose a little of the spark that makes them special. That’s why it’s important we get these details right.
I’ve seen firsthand how targeted programs and community partnerships have helped our small towns grow stronger. In our local communities, leaders are teaming up with state agencies to create new housing and attract new workers. When government focuses on what it does best – lending a hand without tying too many strings – families and small businesses thrive. That’s the Nebraska way: neighbors helping neighbors, guided by common sense instead of red tape.
But not every idea that comes down from Washington is built with Nebraska in mind. Sometimes what looks like a small tweak on paper can cause a big headache in practice. A recent example is a move by the Director of the Federal Housing Finance Agency, Bill Pulte, to push an untested credit scoring system called VantageScore 4.0 alongside the long-used FICO model. It might sound like an obscure technical change, but it’s the kind of decision that could upend how community banks make home loans and make it tougher for first-time buyers to qualify for a mortgage.
Worse yet, it could push lenders toward riskier loans, the same kind of problem that helped to trigger the housing collapse and Great Recession fifteen years ago. Families who had done everything right suddenly found the value of their home falling, while local banks faced mounting pressure from decisions made far from central Nebraska. We shouldn’t repeat those mistakes just because Washington wants to experiment with a new scoring formula. We learned that when lending gets detached from reality, it’s families and taxpayers that bear the cost. Nebraska weathered that storm better than most because we stuck to conservative, commonsense principles. But even the strongest foundation can crack if the federal government forgets those lessons.
The FHFA’s decision to favor a model backed by the nation’s three biggest credit bureaus – the same companies that already control so much of the credit market – raises fair questions about competition and fairness. If government forces lenders to adopt systems that are costly or unproven, it’s the Nebraska banks and first-time home buyers who will pay the price. Federal regulators should spend less time creating complexity and more time listening to those on the ground – the local credit unions, the lenders, and most importantly, the homebuyers, who understand what works in rural America. Real transparency means hearing from the people who will actually live with the outcome, not just the ones who design it.
In Nebraska, our state constitution requires a balanced budget and we don’t spend money we don’t have. That same discipline should apply to federal decision-making. Change can be good, but it has to be done right – carefully, openly, and with respect for the people who will live with the consequences.
When we’re talking about something as important as owning a home, those “small” things really do matter. That’s why policymakers, whether in Lincoln or in Washington, should move carefully and always keep their eye on how real people will be affected.
Nebraska has always done well by sticking to what works: common sense and trust in our local communities. If we keep that mindset, we’ll keep our state strong – one thoughtful step at a time.
