(Reuters) -Experian, the world’s largest credit data processing company, faces potential damage of up to 40% of its revenue if the Biden administration revises US credit reporting and scoring, brokerage agency RBC said Thursday.
The proposal to create a government credit reporting agency to help expand access to traditional credit for low-income groups would put it in competition with three credit reporting firms – Experian and its US rivals Equifax and TransUnion.
Reuters says the new agency may include more factors, such as rent and utility bills, in lending decisions. However, the consumer data industry has opposed the move, saying they provide fair and affordable credit for everyone.
“(Experian) is exposed to the long-term risk of significant financial disruption as a result of interventions aimed at bridging economic inequality in the United States through changes in credit rating and data regulation,” RBC analysts Carl Green and Andrew Brook said in a note to a client.
Companies that account for up to 40% of Experian’s total revenue, and even a higher share of revenue, may be vulnerable to the impact of the proposal, they said.
RBC, which downgraded Experian shares to “worse than indicators” from “sector indicators”, said that the market did not take these risks into account in the share price. By 1324 GMT, the stock fell 2.4% to £ 26.7.
Experian said the company has always operated in a highly regulated environment. “We work closely with federal and state administrations in the United States, as well as our regulatory bodies.”
Reporting by Tapanjana Rudra, Aniruddha Gosh and Muviji M. in Bangalore; Written by Sachin Ravikumar; Edited by Arun Coyur