FHFA Chief Pulte Slams FICO Monopoly, Directs Fannie/Freddie to Approve VantageScore
FICO is trading near its 52-week low of $870.01 (6.2% above the low) on elevated volume (2.3× avg).
Summary
FHFA Director Bill Pulte publicly accused Fair Isaac of operating a monopoly over credit scores and directed Fannie Mae and Freddie Mac to approve all lenders using the rival VantageScore model. FICO shares fell 18% to $922.67 in Friday morning trading, while Equifax, TransUnion, and Experian also dropped sharply. Pulte also accused the three credit bureaus of overcharging Americans and said the agency is seriously considering a bi-merge and stronger solutions. This is a direct regulatory threat to FICO's core Scores business, which drove 41% revenue growth last quarter. The directive to approve VantageScore could erode FICO's pricing power and market share in mortgage lending. Watch for any formal FHFA rulemaking or Fannie/Freddie implementation details.
At the time of this announcement, FICO was trading at $923.58 on NYSE in the Finance sector, with a market capitalization of approximately $19.9B. The 52-week trading range was $870.01 to $1,998.01. This news item was assessed with negative market sentiment and an importance score of 9 out of 10. Source: Dow Jones Newswires.