A group of 23 organizations, ranging from real estate trade organizations to lending companies, has jointly signed a letter urging Congress to take swift action against mortgage credit trigger leads.
A trigger lead occurs when an inquiry is made to a credit reporting agency after a consumer applies for a mortgage. That lead is often sold to third parties, which may include other lenders, without the consumer’s knowledge or consent. Such sales then result in unwanted contacts to consumers by the parties who bought the trigger leads; many of those consumers, unsurprisingly, reach out to their lenders to complain and accuse them of selling their data.
Under current law, it’s up to the consumer to opt out and notify a credit reporting agency that their individual data is not to be sold as a trigger lead. The Homebuyers Privacy Protection Act of 2024, introduced by Senators Jack Reed, D-R.I., and Bill Hagerty, R-Tenn., and Representatives John Rose, R-Tenn., and Ritchie Torres, D-N.Y.
Via the proposed regulations, the Fair Credit Reporting Act would be amended to prevent credit reporting agencies from furnishing trigger leads to third parties except under limited circumstances during a real estate transaction. Those circumstances include if the third party receiving the lead has certified to the credit agency that it originated the consumer’s current mortgage; if the third party is servicing the consumer’s current mortgage; or if it’s a depository institution where the consumer has a current account.
The Homebuyers Privacy Protection Act of 2024 was introduced in early February. The coalition’s letter, addressed to the chairs and ranking members of the Senate Committee on Banking, Housing and Urban Affairs and the House Committee on Financial Services, urges them “to support this carefully crafted proposal and to schedule the two bills for markup before your respective committees as soon as possible.”
“In short, the Homebuyers Privacy Protection Act would stop the abusive use of trigger leads — while narrowly preserving them for legitimate uses such as existing customer relationships. Again, we urge you to support this bipartisan solution for consumers and promptly consider it for markup within your respective committees. We look forward to our work together on this important issue.”
Co-signing the letter were the American Bankers Association; America’s Credit Unions; AmeriHome Mortgage; the Broker Action Coalition; the Center for Responsible Lending; the Community Home Lenders of America; Consumer Action; the Consumer Federation of America; Equity Prime Mortgage; Freedom Mortgage; Guild Mortgage; the Housing Policy Council; the Independent Community Bankers of America; the Leading Builders of America; the Mortgage Bankers Association; the National Association of Home Builders; the National Association of Mortgage Brokers; the National Association of Realtors; the National Consumer Law Center; the National Housing Conference; Rocket Mortgage; Union Home Mortgage; and USPIRG.
