U.S. Sens. Jack Reed and Bill Hagerty have reintroduced the Homebuyers Privacy Protection Act, a measure drafted to reduce spam calls, texts, and emails from irresponsible players in the mortgage industry.
The bipartisan Homebuyers Privacy Protection Act would crack down on the misuse of mortgage “trigger leads”—which occur when a consumer’s credit inquiry “triggers” the sale of their information to third-party lenders and businesses. When a mortgage lender runs a credit check during the process to buy a home, it appears on the consumer’s credit report. The major credit reporting bureaus (including Equifax, Experian, and TransUnion) may then sell that information to other lenders or brokers, which then use it to contact consumers unprompted, often in a predatory manner, to solicit business.
“Buying a home is already a complex and stressful process. Consumers should not get needlessly ‘spammed’ with unsolicited, predatory offers just because they take a necessary step in the homebuying process. This bill would halt abusive trigger leads,” said Sen. Reed, a senior member of the Banking, Housing, and Urban Affairs Committee. “The Homebuyers Privacy Protection Act will put consumers back in the driver’s seat and help cut down on the spam. It will help reduce predatory practices and provide much needed relief from unwanted industry calls, texts, and emails.”
According to the National Association of Mortgage Brokers (NAMB) President Jim Nabors: “It is not unusual for bank customers to receive 100+ misleading texts, phone calls and emails within the first 24 hours of applying for a mortgage and the passage of this bill will go a long way in relieving this burden to homebuyers.”
Prospective homebuyers who are bombarded by these kinds of solicitations typically have no idea their information was sold without their consent.
“Unsolicited phone calls caused by trigger leads have become an intolerable nuisance to many Tennesseans,” said Sen. Hagerty. “I’m pleased to join this bipartisan, bicameral legislation that will protect Americans’ data and help reduce endless spam calls.”
The Homebuyers Privacy Protection Act would limit the ability of credit reporting bureaus to sell trigger leads to mortgage brokers and lenders when the bureaus learn that a consumer has applied for a mortgage. This measure would amend the Fair Credit Reporting Act (FCRA) to include specific restrictions on the use of trigger leads in the residential mortgage lending space, with very limited exceptions for institutions that a consumer currently knows and trusts. This bill would also prohibit credit reporting bureaus from selling a trigger lead unless a mortgage broker or lender certifies to the bureau that they already have a deep financial relationship with the consumer, such as an existing mortgage loan or a deposit account. Trigger leads would also be permitted if a consumer affirmatively opts in to receiving them.
“MBA has worked closely with industry stakeholders and a large, bipartisan group of lawmakers in the House and Senate to push for action that ends the abusive use of mortgage credit leads,” said Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit, CMB. “Consumers remain vulnerable to trigger leads abuses, and we believe strongly that this common-sense legislation will curb the practice while preserving its value in appropriately limited circumstances.”
The Homebuyers Privacy Protection Act is supported by a broad coalition of consumer advocacy groups and financial trades, including NAMB, the MBA, the Independent Community Bankers of America (ICBA), the American Bankers Association (ABA), the Broker Action Coalition, Community Home Lenders of America (CHLA), the National Consumer Law Center (NCLC), the Consumer Federation of America, Americans for Financial Reform, and others.
Identical bipartisan legislation is being introduced in the House of Representatives by Reps. John Rose and Ritchie Torres.
“The Homebuyers Privacy Protection Act will serve as a crucial and transformative step in safeguarding American consumers from unwanted and invasive credit solicitations,” Rep. Torres said. “Too often, homebuyers find themselves bombarded with unsolicited offers beginning the moment they apply for a mortgage that persist indefinitely. This bill will ensure that consumers maintain greater control over their personal financial information, preventing predatory practices and strengthening data privacy. I am proud to join Congressman Rose in reintroducing this bipartisan legislation, which will provide much-needed protections for American homebuyers.”
Reps. Rose and Torres were joined in sponsoring the bill by a group including Reps. Gabe Amo, Mark E. Amodei, Jack Bergman, Stephanie Bice, Julia Brownley, Emanuel Cleaver, Cleo Fields, Brian Fitzpatrick, Scott Franklin, Andrew R. Garbarino, Michael Guest, Dusty Johnson, Trent Kelly, David Kustoff, Frank D. Luca, John Moolenaar, Joe Neguse, Eleanor Holmes Norton, Zach Nunn, Andy Ogles, Brittany Pettersen, Adrian Smith, Bryan Steil, Tom Suozzi, William Timmons, and Rob Wittman.
“We commend trigger lead reform champions Senators Bill Hagerty and Jack Reed, and Reps. John Rose and Ritchie Torres for their leadership, as well as the large bipartisan group of lawmakers for co-sponsoring the reintroduction of these companion bills,” added Broeksmit. “We will continue to advocate for House and Senate leaders to pass these measures into law as soon as possible.”
Click here for full text of the Homebuyers Privacy Protection Act.
