Fair Isaac Corp.’s shares saw their worst day since March 2020 on Wednesday, falling alongside credit bureau stocks after the head of the Federal Housing Finance Agency questioned credit report pricing. 

The FICO score provider dropped 16%, notching the day’s worst performance among S&P 500 Index members and extending Tuesday’s 8.1% slide. Shares of credit reporting agency TransUnion fell 8.8%, while Equifax Inc. dropped 6.7%.

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FHFA Director Bill Pulte questioned credit score pricing in a series of posts on X this week. He said he was disappointed by FICO’s cost increases and asked why some credit reports “cost double” under President Joe Biden compared to what they did when Donald Trump was first in office. 

At the Mortgage Bankers Association’s Secondary Market in New York this week, Pulte also said the agency is reviewing a shift to a bi-merge credit score for underwriting. That approach would require reports from only two of the major credit bureaus instead of all three. 

“We are encouraged by the FHFA leadership’s commitment to financial safety and soundness, as well as preventing fraud,” said Satyan Merchant, TransUnion’s senior vice president for auto and mortgage, in a statement. “Data demonstrates that a tri-merge report best supports FHFA’s priorities.”

Concerning the data, a representative of TransUnion pointed to a company report that said eliminating one score would “provide an incomplete picture” because a consumer’s score can vary across bureaus.

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Fair Isaac and Equifax did not immediately provide Bloomberg News with a comment on the matter.

“There does not appear to be a specific new proposal, but prior pricing actions are clearly on the FHFA radar,” Baird analyst Jeffrey Meuler wrote to clients. The analyst noted that there are factors that may limit risks for FICO and the bureaus, including that it could be hard to establish the authority to limit business-to-business pricing. 

Jefferies’ Surinder Thind told clients to “buy the dip” in FICO’s shares after Tuesday’s decline. Even if the bi-merge model were adopted by all lenders, the analyst estimates a hit to Fair Isaac’s adjusted earnings per share of 16% at most, with a 10% hit for Equifax and TransUnion. 

FICO said in November that its wholesale royalty for mortgage originations would rise to $4.95 per score, from $3.50. Jim Wehmann, the company’s president of scores, wrote in a blog post announcing the change that the FICO Score had enhanced liquidity, expanded “fair and objective” access to credit and supported homeownership. 

“At $4.95 per score, the royalty collected by FICO for mortgage is entirely fair and reasonable, particularly considering the significant benefits it brings to the industry,” Wehmann wrote. 

Shares of Experian Plc, the other major credit bureau in the US, closed 1.1% lower in London. An Experian representative did not immediately respond to a request for comment.