Senator Josh Hawley Targets FICO's Mortgage Credit Score Pricing In New Probe— 'Most Damaging...'

Sen. Josh Hawley (R-MO) has launched an investigation into Fair Isaac Corp. (NYSE:FICO) over the company’s pricing of credit scoring in the mortgage market. On Monday, Hawley sent a letter to FICO announcing his intent to scrutinize the company’s recent price increases for credit scores. The Missouri senator also called on the Federal Trade Commission (FTC) to launch a parallel investigation. In his letter, Hawley argued that the escalating cost of credit scores is placing an undue burden on homebuyers in an already inflated market. “These price increases are most damaging to the Americans who can least afford them. First-time homebuyers bear a disproportionate burden of the cost,” he stated. Hawley has requested documents from FICO as part of an investigation that could expand into a broader probe of potentially anticompetitive practices in the credit scoring market. He also urged the FTC to investigate potential unfair and anti-competitive practices by FICO, expressing confidence in the agency's independent review. FICO did not immediately respond to Benzinga’s request for comments. BNPL Risks Add To FICO Scrutiny Hawley’s investigation comes in the wake of his ongoing concern over FICO’s near-monopoly power and the deemed oligopoly of the top three credit bureaus, TransUnion (NYSE:TRU), Equifax (NYSE:EFX), and Experian (OTC:EXPGF). Notably, FICO’s credit scoring practices have also been under scrutiny in the past. In June, the company’s decision to use Score 10 for its new “Buy Now, Pay Later” initiative raised concerns as it would not be included in Score 8, the most widely used credit scoring product. This move could potentially impact millions of Americans’ credit scores. A Bankrate survey found that about half of BNPL users have faced issues such as overspending and missed payments. FICO Price Action: On Monday, FICO shares declined 5.70% to close at $1,063.33, following the news. On a year-to-date basis, the shares fell 35.29%. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor. Image via Shutterstock