Hawley urges Trump DOJ to investigate FICO for 'monopoly' over US credit scores
FICO holds nearly 90% market share, says Sen Josh Hawley
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Sen. Josh Hawley, R-Mo., is urging President Donald Trump's Justice Department to investigate the nation's top credit-scoring company for abusing its "monopoly" over the industry.
The Fair Isaac Corporation (FICO) has repeatedly raised prices in recent years and secured massive profits while facing little competition, Hawley wrote in a letter to Assistant Attorney General Gail Slater Friday, adding that former President Joe Biden's administration had ignored his earlier calls for scrutiny.
"FICO dominates the business-to-business credit scoring market with a roughly 90% market share. It enjoys a sweetheart deal from the federal government wherein its credit scores are required for loans originated with multiple government entities. But FICO has abused its government-granted market power," Hawley wrote.
"FICO has exploited working Americans with its monopoly power for too long," he added to Slater, who runs the DOJ's antitrust division. "Antitrust scrutiny from your office is warranted."
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Sen. Josh Hawley, R-Mo., is calling on President Donald Trump's administration to open an antitrust investigation into the nation's top credit-scoring company. (Tom Williams-Pool/Getty Images / Getty Images)
FICO argued that its success is not due to any government action in a statement to Fox Business on Friday.
"The vast majority, approximately 99%, of FICO Scores used for decisioning across the consumer credit industry are used outside mortgage originations. And even within the mortgage market, lenders originate nearly thirty percent of all mortgages outside the Fannie Mae and Freddie Mac programs but still choose to use FICO Scores for those mortgages. The royalty collected by FICO remains a small percentage of the cost of the tri-merge credit report and score bundle (on average approximately 15% of the $80 to well over $100 tri-merge bundle cost), which is itself an exceedingly small share of overall mortgage closing costs," the company said in a statement.
"The FICO Score represents less than 2/10 of 1% of the approximately $6,000 in average closing costs for a mortgage—also compelling value given the central role the FICO Score plays in the origination of approximately $2 trillion in mortgages each year." it added.
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Hawley's request comes weeks after Trump's administration filed its first antitrust lawsuit, seeking to block a big tech acquisition.
‘The Big Money Show’ co-hosts discuss buy now, pay later spending options and the impact it will now have on your credit score.
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That action seeks to block Hewlett-Packard Enterprise from acquiring rival wireless local area network tech provider, Juniper Networks, in a $14 billion deal.