Federal Housing Finance Agency (FHFA) Director Bill Pulte publicly criticized credit scoring company FICO on Wednesday, saying the firm is keeping consumer costs high rather than competing on price. Pulte made the remarks on social media, where he said the company "uses various means to increase price on the American people. So unnecessary."
Pulte, who leads the federal housing regulator and who briefly served as acting director of national intelligence over the summer, framed the comments less than seven weeks before midterm elections in which Republicans confront voter unease about the cost of living.
FICO is the producer of the numerical credit scores lenders commonly use to evaluate prospective borrowers. Those scores feed into lending decisions, and lower scores can translate into higher borrowing costs for consumers. Representatives for FICO did not immediately respond to a request for comment.
Earlier in the year, Pulte announced that the housing finance companies Fannie Mae and Freddie Mac will accept additional credit scores generated by the VantageScore 4.0 model. Those alternative scores incorporate rent and utility payment histories with the stated aim of increasing access to affordable mortgages for more consumers.
Separately, Pulte said his agency expected to meet this week with the three major credit reporting firms - Experian, Equifax and TransUnion - as part of its review of credit reporting practices. He said the FHFA was "studying using only a single credit report" as a potential method to lower costs for borrowers.
Market snapshot
The report included market movement details listed alongside the story: EFX -1.34%, EXPN -1.82%, FICO +1.14%, FMCC -4.37%, FNMA -2.58%, TRU -1.46%.
This line of commentary from the FHFA director highlights ongoing regulatory attention on how credit scoring and credit report usage affect consumer borrowing costs, and signals active engagement between the agency and major credit reporting firms on potential adjustments to current practices.