U.S. Sens. Jack Reed (D-RI) and Bill Hagerty (R-TN) introduced legislation that seeks to reduce spam calls, texts, and emails from irresponsible players in the mortgage industry.
The Homebuyers Privacy Protection Act, S. 1467, 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 may then sell that information to other lenders or brokers. Those brokers may then use it to contact consumers unprompted, often in a predatory manner, to solicit business. Prospective homebuyers often have no idea that their information was sold without their consent.
“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,” National Association of Mortgage Brokers (NAMB) president Jim Nabors said.
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.
“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,” Reed said. “The Homebuyers Privacy Protection Act will put consumers back in the driver’s seat and help cut down on the spam.”
This bill would amend the Fair Credit Reporting Act (FCRA) to include specific restrictions on the use of trigger leads in the residential mortgage lending space.
“Unsolicited phone calls caused by trigger leads have become an intolerable nuisance to many Tennesseans,” Hagerty said. “I’m pleased to join this bipartisan, bicameral legislation that will protect Americans’ data and help reduce endless spam calls.”
The bill would 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. Trigger leads would also be permitted if a consumer affirmatively opts in to receiving them.
The Homebuyers Privacy Protection Act is supported by a broad coalition of groups and financial trades, and associations, including the Mortgage Bankers Association, the Independent Community Bankers of America, the American Bankers Association, the National Association of Mortgage Brokers, the Broker Action Coalition, Community Home Lenders of America, the National Consumer Law Center (on behalf of its low-income clients), the Consumer Federation of America, Americans for Financial Reform, and others.
Companion legislation is being introduced in the House by Reps. John Rose (R-TN) and Ritchie Torres (D-NY).
This bill passed in the Senate in the last Congress but it stalled in the House of Representatives.