Sen. Josh Hawley calls on DOJ to investigate FICO

ST. LOUIS – “I think the rates credit card companies are charging are outrageous,” U.S. Senator Josh Hawley said during an October 2024 debate.

Even before the Senate debate hosted by FOX 2 in November, Sen. Hawley wanted more accountability in the financial services industry. Now in his second Senate term, he’s again taking aim at Fair Isaac Corporation, or FICO. Earlier this month, Hawley sent a letter asking the Department of Justice to investigative FICO, alleging anticompetitive practices and repeated price hikes.

“There’s only one company in America who basically does those FICO scores, and what they charge to consumers is outrageous, and it goes up every year, and most of the time, you don’t know about it ‘til you get billed,” Hawley said.

Hawley told the DOJ, “FICO enjoys a sweetheart deal from the federal government wherein its credit scores are required for loans originated with multiple government entities.”

Hawley says FICO has abused its government-granted market power.

“Some bank runs your FICO score. You’ve got to pay for it. You go to buy a car; a car dealer runs your FICO score. You’ve got to pay for it. You get charged,” he said. “The charges go up and up and up, and nobody can afford it, and nobody has given me given any option to opt out of it or have a competitor do it instead.”

FOX 2 reached out to FICO to inquire about these allegations. The company responded with a statement:

FICO continues to compete vigorously across consumer credit markets, and the FICO Score has long been freely chosen by lenders, investors, and other participants across consumer credit markets because it is trusted as the most predictive and reliable credit score, enabling lenders to fairly expand credit access to American consumers. The success of the FICO Score is not due to any government action in the mortgage market. In fact, 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 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.

“This needs to stop. I’ve asked for investigation into their anti-competitive practices,” Hawley said. “I just think this is a basic protection of American consumers and Missouri consumers. We are getting ripped off here by these people that it needs to stop.”