Posting date: Dec 30, 2024:
Mortgage industry implores lower chamber to take action to curb practice
Legislation, Mortgage, Regulations and Compliance
The U.S. Senate has approved the Homebuyers Privacy Protection Act, a bill limiting the use and abuse of trigger leads in the mortgage industry.
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.
Those complaints have led many within the mortgage business to push for lawmakers to take action against trigger leads. For a while this year, such legislation looked close; a nationwide trigger lead was included in the Senate’s Fiscal Year 2025 National Defense Authorization Act (NDAA), drawing praise from the lending industry groups.
But that push seemingly died when the bill was stripped from the NDAA earlier this month, stalled by lobbying from credit bureaus and uncertainties in the agenda of the incoming presidential administration.
However, hitting the Senate floor individually, the Homebuyers Privacy Protection Act earned a green light from the upper chamber, with mortgage groups commending its passage. The bill now heads to the House of Representatives, where its approval faces a more ambiguous fate. The House will have two days to make a decision on the bill before it takes a winter break.
“CHLA has been warning Washington for over two years that this part of the mortgage business needs drastic reform to protect American families from unwanted spam,” said Scott Olson, executive director of the Community Home Lenders of America (CHLA). “This is a giant step forward, and we urge the House to do its part to make this reform a reality.”
“MBA applauds the Senate for passing legislation we championed to stop the abusive use of mortgage trigger leads while preserving their use in appropriately limited circumstances during a real estate transaction,” said Bob Broeksmit, president and CEO of the Mortgage Bankers Association (MBA). “We commend Senators Jack Reed (D-RI) and Bill Hagerty (R-TN), as well as the bill’s 42 bipartisan cosponsors, for their leadership in introducing and passing this important bill, and we implore the House of Representatives, which has more than 90 bipartisan cosponsors of the bill, to pass it during the remaining days of the current Congress.
“Consumers remain vulnerable to trigger leads abuses heading into the spring homebuying season. Absent a House vote this week, MBA plans to work aggressively with industry stakeholders and members of the 119th Congress to advance this needed change to trigger leads policy as soon as possible.”
