Shares of Equifax Inc. (NYSE:EFX) are trading lower Friday afternoon as investors weigh regulatory threats from the Federal Housing Finance Agency against the nationwide expansion of VantageScore in government-backed mortgages.
- Equifax stock is feeling bearish pressure. Why is EFX stock dropping?
FHFA Director Accuses Credit Bureaus of ‘Cartel-Like’ Overcharging
While FHFA Director Bill Pulte’s Thursday evening directive ordering Fannie Mae and Freddie Mac to approve VantageScore 4.0 for all lenders theoretically benefits Equifax, which co-owns VantageScore alongside Experian and TransUnion, Pulte accompanied the announcement with sharp criticism aimed directly at the three major credit reporting agencies.
In a series of public statements, Pulte accused Equifax, Experian and TransUnion of “overcharging Americans for far too long” and operating with “cartel-like” practices.
Pulte noted that discussions with credit bureau leadership regarding fee reductions had yielded little progress, adding that the agency will “not allow companies to take advantage of American consumers”.
‘Bi-Merge’ Proposal Threatens Core Mortgage Data Volumes
The primary driver behind the decline in EFX shares is Pulte’s explicit warning that the FHFA is “seriously considering bi-merge” credit reporting and “stronger solutions”.
Under the traditional “tri-merge” model, mortgage lenders are required to pull credit files from all three bureaus—Equifax, Experian, and TransUnion, for every home loan delivered to Fannie Mae or Freddie Mac.
Shifting to a bi-merge framework would allow lenders to pull reports from only two bureaus, effectively removing one-third of total mortgage report volume across the industry and creating substantial structural revenue headwinds for Equifax.
EFX Stock Slides Friday Afternoon
EFX Price Action: Equifax shares were down 5.62% at $178.46 at the time of publication on Friday, according to Benzinga Pro data.
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