Stocks of major credit-score providers tumbled on Tuesday as regulators and a U.S. senator raised concerns about the affordability of credit scores and bureau services.
Fair Isaac Corporation (NYSE:FICO) led the declines, falling 8% on the day. TransUnion (NYSE:TRU) and Equifax (NYSE:EFX) each lost 7% in the same session. The moves came after Federal Housing Finance Agency Director Pulte said that pricing for credit scores and credit bureau services must be more affordable.
Market declines followed comments tied to a Politico report indicating that Senator Josh Hawley is initiating an investigation into how Fair Isaac prices the products it sells into the mortgage market. According to the reporting, the Missouri Republican sent a letter on Monday to FICO announcing his intention to probe the company’s price increases for credit scores.
In parallel, Hawley sent a separate letter to the Federal Trade Commission urging that the agency carry out a similar inquiry. In his letter to FICO, the senator argued the rising cost of credit scores is adding pressure on homebuyers facing an already costly market. He wrote, "These price increases are most damaging to the Americans who can least afford them. First-time homebuyers bear a disproportionate burden of the cost," language that was included in the letter obtained by Politico.
The sequence of public comments and the reported congressional inquiry coincided with the price moves in the equity market for the three companies named above. The statements from FHFA leadership and the actions by a sitting senator underscore the regulatory and political attention focused on the cost of credit information used in mortgage transactions.
Market snapshot
- Fair Isaac Corporation (FICO): down 8% on Tuesday.
- TransUnion (TRU): down 7% on Tuesday.
- Equifax (EFX): down 7% on Tuesday.
Context and next steps
The reported investigation by Senator Hawley and his request to the FTC, together with the FHFA director's remarks on affordability, represent immediate sources of regulatory and political scrutiny for credit-score providers and credit bureaus. The reporting identified these actions as the proximate developments that preceded the equity declines for the named companies.