Shares of Fair Isaac Corporation fell by more than 5% on Monday following reports that Republican Senator Josh Hawley is initiating an inquiry into the company’s pricing practices for services used in the mortgage market.
According to the report, Hawley sent a letter to Fair Isaac Corp. on Monday notifying the company of his intent to investigate recent increases in the price of credit scores. In addition, Hawley forwarded a similar letter to the Federal Trade Commission, urging the agency to open its own probe into the matter. The correspondence, obtained by the reporting outlet, frames the price changes as a source of financial pressure on prospective homebuyers.
In his letter to FICO, Hawley wrote that the effect of these price increases falls heaviest on those least able to shoulder them. He singled out first-time homebuyers as carrying a disproportionate share of the burden, writing:
"These price increases are most damaging to the Americans who can least afford them. First-time homebuyers bear a disproportionate burden of the cost," Hawley wrote in the letter to FICO.
The lawmaker’s outreach to both the company and the FTC sets up the possibility of parallel inquiries by a member of Congress and by a federal regulator. The letters cited in the report focus on increases in the cost of credit scores that are used in mortgage underwriting and pricing.
The report does not provide additional details about the scale or specifics of the price increases, nor does it include a response from Fair Isaac Corporation or the Federal Trade Commission. The available information centers on the letters sent by the senator and the market reaction in the form of the stock price decline on Monday.
Market participants will likely monitor whether the senator’s action prompts further regulatory scrutiny or formal investigations, and whether FICO responds publicly to the allegations outlined in the correspondence.
Key points
- FICO shares dropped more than 5% on Monday after reports of Senator Josh Hawley launching an investigation into the company’s mortgage-related pricing.
- Hawley sent letters to both Fair Isaac Corp. and the Federal Trade Commission urging review of recent credit-score price increases.
- The senator argues higher credit-score costs are adding strain to homebuyers, with first-time buyers particularly affected; the report does not include FICO or FTC responses.
Risks and uncertainties
- Potential regulatory scrutiny - The letters to FICO and the FTC introduce the risk of investigations that could require company responses or result in further action.
- Market reaction - The immediate stock decline reflects investor concern; further volatility is possible pending more information or official responses.
- Consumer impact - The allegations, if substantiated, suggest increased costs for mortgage applicants, particularly first-time homebuyers, which could affect mortgage market dynamics.