A coalition of industry trade groups has issued a letter to the Senate Banking Committee and House Financial Services Committee to support and mark-up the bicameral, bipartisan Homebuyers Privacy Protection Act of 2024.
The letter comes from a coalition of 23 industry stakeholders, including the Mortgage Bankers Association (MBA), National Association of Home Builders (NAHB), National Association of Mortgage Brokers (NAMB), and National Association of Realtors (NAR), among others, pushes for the passage of S.3502, The Homebuyers Privacy Protection Act and HR 7297, two measures to amend that would curb the abusive use of mortgage credit “trigger leads” in all but a limited set of circumstances.
“Trigger leads occur when a consumer applies for a mortgage (both purchase and refinance loans) and the requisite inquiry to a credit reporting agency (CRA) by a lender notifies the CRA that the consumer is interested in home financing,” said the letter. “This trigger lead is then sold to data brokers (including other lenders) without the consumer’s knowledge or approval. Consumers may then be contacted (by phone, text, or mail) by the other parties that have purchased the trigger leads.”
Banning trigger leads
Introduced by U.S. Reps. John Rose and Ritchie Torres, the Homebuyers Privacy Protection Act would ban trigger leads except in limited circumstances.
When a consumer applies for a mortgage, credit bureaus are notified that the consumer is interested in financing, which is referred to as a “trigger lead.” That information is then sold by the credit bureaus to data brokers (including other lenders) without the consumer’s knowledge or approval. Consumers are then often bombarded with calls that confuse them and attempt to lure them away from their chosen lenders.
Protecting American homebuyers
The Homebuyers Privacy Protection Act prohibits a consumer reporting agency from furnishing a trigger lead unless an individual chooses to opt-in. In that case, only certain approved groups will be notified that an individual is seeking a new mortgage. The Homebuyers Privacy Protection Act is tailored to give consumers more control over the information they receive as part of the homebuying process, and eliminates trigger lead abuses while preserving their use in appropriately limited circumstances.
“Trigger leads exploit consumers’ financial inquiries, turning them into commodities sold without consent. We must empower homebuyers, not bombard them with predatory calls,” said Rep. Torres. “This bipartisan legislation takes a crucial step in safeguarding consumer privacy and choice in the mortgage process.”
Under the Fair Credit Reporting Act (FCRA), credit reporting agencies are permitted by law to resell consumer information to prospective creditors without the consumer’s permission if the prospective creditor is prepared to make that consumer a “firm offer of credit.” The offer of credit must include a notification to the consumer informing them of the right to “opt out” of receiving future prescreened offers of credit or other solicitations, but these opt-out disclosures are not required in cases of phone solicitations and offers.
Click here to read the full letter from the coalition of industry stakeholders to leadership of the Senate Banking Committee and House Financial Services Committee.
