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Senator Josh Hawley (R-MO) urged the antitrust arm of the U.S. Department of Justice to investigate Fair Isaac Corp. (NYSE: FICO) “potentially anticompetitive practices,” according to a recent letter.
The data analytics company, known for its credit scoring services, appears to be “using its monopolistic power in the credit scoring market to increase costs for mortgage lenders, an increase that will be passed on to consumers,” Hawley wrote to Deputy Attorney General Jonathan Kanter.
To be sure, the cost of FICO credit scores has increased 500% over the past two years, he noted, adding that FICO stock has more than doubled over the same period. Many homebuyers are required to obtain a mortgage loan from a lender that uses FICO, in what Hawley calls a “government-granted monopoly.”
“This is, in short, a company abusing its market power to increase its profits and make life worse for Americans,” he said in Tuesday’s letter.
Fair Isaac (FICO) did not immediately respond to a request for comment from Seeking Alpha.
Baird, maintaining his neutral rate on FICO, called the letter “negative,” as it “likely brings into sharper focus risks related to potentially more material financial/business risks should the Department of Justice take action “.
FICO shares dropped by 3.3% in mid-afternoon trading on Wednesday.