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Investors are celebrating a major shake up in how FICO scores will be shared with mortgage lenders, as shares of parent company Fair Isaac have rallied more than 20% on Thursday. That stock rally follows FICOs announcement on Wednesday of a new pricing model that will allow mortgage lenders to calculate and distribute credit scores directly to borrowers, thereby eliminating the need to rely on the three nationwide credit bureaus for this information. In addition to its legacy pricing model, lenders can now opt for a direct license option that will save them up to 50% on per-score FICO fees. The FICO score is one of a few different credit scoring models that help lenders assess how likely a borrower is to pay back a loan. According to FICO, the score is used by 90% of top U.S. lenders. The new program puts pricing model choice in the hands of those who use FICO Scores to drive mortgage decisions, Will Lansing, CEO of Bozeman, Montana-based FICO said in a statement. A direct licensing program was always a possibility, Lansing said in an interview with CNBC on Thursday, but this move was primarily motivated by a call for increased competition and lower prices by Bill Pulte, director of the Federal Housing Finance Agency. FICO UNDER FIRE Beginning in May, Fair Isaac came under fire by Pulte, who said he was extremely disappointed about FICOs announcement of price hike for credit scores, then announced in July that mortgage lenders could use a rival credit score, the VantageScore, to evaluate potential borrowers, and even called FICO a monopoly. I think we have responded to the call, and so I think there will be a lot of happiness around the idea that the score prices are flat-to-down for next year and we have competing channels of distribution, Lansing said on CNBC. Containing costs throughout the mortgage lending system will ultimately trickle down to consumers, he added. The surge in Fair Isaacs stock price on Thursday follows a three-month selloff of nearly 41% amid Pultes criticism of FICO scores. In a post on the X platform on Thursday, Pulte said he genuinely appreciates that FICO responded to constructive criticism with creative solutions that ultimately benefit American consumers. While their decision is a first step, it is appreciated. I encourage the Credit Bureaus [sic] to also take similar creative and constructive actions to make our markets safer, stronger, and more competitive. CREDIT BUREAUS SLUMP But whats good seen as news for FICO, at least according to shareholders, isnt so good for the three credit bureaus. Shares of Experian, TransUnion, and Equifax fell between 4.3% and nearly 10% on Thursday. Direct licensing could eliminate the margin that credit bureaus currently earn on the FICO credit score, according to Citigroup analysts. “Our initial reaction is this is negative for Experian and Equifax,” they wrote in a note.
Category:
E-Commerce
The Trump administration is canceling $7.6 billion in grants that supported hundreds of clean energy projects in 16 states, all of which voted for Democrat Kamala Harris in last year’s presidential election. The cuts were announced in a social media post late Wednesday by Russell Vought, the White House budget director: Nearly $8 billion in Green New Scam funding to fuel the Lefts climate agenda is being cancelled. The move comes as President Donald Trump threatens cuts and firings in his fight with congressional Democrats over the federal government shutdown. These cuts are likely to affect battery plants, hydrogen technology projects, upgrades to the electric grid, and carbon-capture efforts, among many others, according to the environmental nonprofit Natural Resources Defense Council. The Energy Department said in a statement Thursday that 223 projects were terminated after a review determined they did not adequately advance the nations energy needs or were not economically viable. Officials did not provide details about which projects are being cut, but said funding came from the Office of Clean Energy Demonstrations, Office of Energy Efficiency and Renewable Energy, and other DOE bureaus. The cuts include $1.2 billion for California’s hydrogen hub that is aimed at accelerating hydrogen technology and production, according to Gov. Gavin Newsoms office. The private sector has committed $10 billion for the hydrogen hub, Newsom’s office said, adding that canceling the Alliance for Renewable Clean Hydrogen Energy Systems threatens over 200,000 jobs. Clean hydrogen deserves to be part of Californias energy futurecreating hundreds of thousands of new jobs and saving billions in health costs, the Democratic governor said. California Democratic Sen. Alex Padilla called the cancellation of the project vindictive, shortsighted and proof this administration is not serious about American energy dominance. The DOE said it has reviewed billions of dollars awarded by the Biden administration after Trump won the presidential election last November. More than a quarter of the rescinded grants were awarded between Election Day and Inauguration Day, the department said. The awards totaled more than $3.1 billion. President Trump promised to protect taxpayer dollars and expand Americas supply of affordable, reliable, and secure energy. Todays cancellations deliver on that commitment, Energy Secretary Chris Wright said. The Trump administration has broadly targeted climate programs and clean energy, and is proposing to roll back vehicle emission and other greenhouse gas rules it says cant be justified. The Environmental Protection Agency has proposed overturning a 2009 finding that climate change threatens public health. Many climate scientists have criticized the EPA effort as biased and misleading. Democrats and environmental organizations were quick to slam the latest cuts, saying they would raise energy costs. “This is yet another blow by the Trump administration against innovative technology, jobs, and the clean energy needed to meet skyrocketing demand,” said Jackie Wong, a senior vice president at NRDC. Vought said the projects being cut are in California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Vermont, and Washington state. ___ The Associated Press receives support from the Walton Family Foundation for coverage of water and environmental policy. The AP is solely responsible for all content. For all of APs environmental coverage, visit apnews.com/hub/climate-and-environment By Michael Phillis and Matthew Daly, Associated Press
Category:
E-Commerce
U.S. stocks are drifting around their records on Thursday as technology stocks keep rising and as Wall Street keeps ignoring the shutdown of the U.S. government. The S&P 500 rose 0.1%, coming off its latest all-time high. The Dow Jones Industrial Average rose 68 points, or 0.2%, as of 1:58 p.m. ET, and the Nasdaq composite was 0.3% higher and hovering above its own record. Thursdays on Wall Street typically mean investors are reacting to the latest weekly tally of U.S. workers applying for unemployment benefits. But D.C.s shutdown means this weeks report on jobless claims has been delayed. An even more consequential report, Fridays monthly tally of jobs created and destroyed across the economy, will likely also not arrive on schedule. That increases uncertainty when much on Wall Street is riding on investors hopes that the job market will slow by a precise amount: enough to convince the Federal Reserve to keep cutting interest rates, but not by so much that it leads to a recession. “The Fed has been on record that they are very data dependent, and the lack of data from public sources is likely to be problematic,” said Brian Rehling, head of global fixed-income strategy at Wells Fargo Investment Institute. So far, the U.S. stock market has looked past the delays of such data. Shutdowns of the U.S. government have tended not to hurt the economy or stock market much, and the thinking is that this one could be similar, even if President Donald Trump has threatened large-scale firings of federal workers this time around. That left corporate announcements as the main drivers of trading on Thursday. Stocks in the chip and artificial-intelligence industries climbed after OpenAI announced partnerships with South Korean companies for Stargate, a $500 billion project aimed at building AI infrastructure. Samsung Electronics rose 3.5% in Seoul, and SK Hynix jumped 9.9%. The announcement also sent ripples around the world. On Wall Street, Advanced Micro Devices climbed 3.7%, and Broadcom gained 2.2%. Taiwan Semiconductor Manufacturing Co., a major maker of chips, saw its stock that trades in the United States slip 0.3%. Excitement around AI and the massive spending underway because of it has been a major reason the U.S. stock market has hit record after record, along with hopes for easier interest rates. But AI stocks have become so dominant, and so much money has poured into the industry, that worries are rising about a potential bubble that could eventually lead to disappointment for investors. Occidental Petroleum fell 7.8% after it agreed to sell its chemical business, OxyChem, to Berkshire Hathaway for $9.7 billion in cash. It could be the final big purchase for Berkshire Hathaway with famed investor Warren Buffett as its CEO. Fair Isaac jumped 20.7% after announcing a program that will allow mortgage lenders to access and distribute FICO credit scores directly to their customers, cutting out such big credit bureaus as TransUnion, Equifax, and Experian. TransUnions stock tumbled 9.5%, while Equifax slid 7.7%. The stock of the United Kingdoms Experian fell 3.6% in London. Londons FTSE 100 edged down by 0.2%, but indexes were much stronger across Europe and Asia. South Koreas Kospi jumped 2.7%, for one of the biggest gains following the big jumps for Samsung Electronics and SK Hynix. In the bond market, the yield on the 10-year Treasury ticked down to 4.09%, from 4.12% late Wednesday. By Stan Choe, AP business writer AP Writers Teresa Cerojano and Matt Ott contributed.
Category:
E-Commerce
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