Mortgage Bankers of America President and CEO Bob Broeksmit said his organization applauds the Senate on passing legislation that will protect homebuyers’ privacy.
The legislation, H.R. 2808, the Homebuyers Privacy Protection Act, was passed by unanimous consent. Broeksmit said the legislation would put an end to the abusive use of mortgage credit trigger leads. Trigger leads are generated when a homebuyer applies for a mortgage and a hard inquiry is made on their credit report. The inquiry signals to other lenders and insurance companies that the borrower is actively seeking credit which triggers the sale of their credit report inquiry data to other lenders.
“This new law will help protect consumers from the barrage of unwanted calls, texts, and emails they too often receive immediately after applying for a mortgage,” Broeksmit said. “It marks a major victory for borrowers and will create a more efficient, responsible, and respectful home buying process.”
The legislation would amend the Fair Credit Reporting Act to prohibit consumer reporting agencies from furnishing trigger leads except in limited circumstances.
Introduced by U.S. Sens. Bill Hagerty (R-TN) and Jack Reed (D-RI), and by U.S. Reps. John Rose (R-TN) and Ritchie Torres (D-NY), the legislation was passed by the House earlier this summer.
Rose, the primary Republican sponsor of the bill, said he had letters from 43 state Attorneys General and 16 trade groups, as well as 80 co-sponsors for the bill. Trade groups supporting the legislation included the Mortgage Bankers Association, the Independent of Community Bankers of America, the American Bankers Association, the National Consumer Law Center, the Consumer Federation of America and Americans for Financial Reform.
“Approving the House-passed Homebuyers Privacy Protection Act by unanimous consent ensures these abusive mortgage ‘trigger leads’ will be eliminated, while narrowly preserving them for legitimate, transparent and accountable uses,” American Bankers Association President and CEO Rob Nichols said.
Rose said many unscrupulous companies contact prospective homebuyers posing at the homebuyers’ lender. The Homebuyers Privacy Protection Act would make that illegal, he said. The legislation would allow homebuyers to opt into receiving trigger leads, he said.
Passage through the Senate was the final Congressional step in the process and the bill now heads to President Donald Trump’s desk for signing.