Sens. Jack Reed and Bill Hagerty have introduced a bipartisan measure, the Homebuyers Privacy Protection Act (S. 3502), a bill that would restrict credit reporting agencies from selling consumers’ contact information when they apply for a residential mortgage. “Trigger leads” often result in a deluge of solicitations for prospective homebuyers, leading to hassles and confusion for consumers.
The Homebuyers Privacy Protection Act would amend the Fair Credit Reporting Act to prohibit credit reporting agencies from selling trigger leads when consumers apply for residential mortgage loans unless the consumer has opted into the creation and sale of such leads or if certain exceptions apply: the recipient of the trigger lead has originated the consumer’s current mortgage, services the consumer’s current mortgage, or is an insured depository institution that holds a current account for the consumer.
“A mortgage application should not be public information,” said Rebeca Romero Rainey, President and CEO of the Independent Community Bankers of America (ICBA). “ICBA and the nation’s community banks thank Sens. Reed and Hagerty for introducing the Homebuyers Privacy Protection Act to restrict the sale of trigger leads and give consumers more control over their private financial information and shield them from unwanted solicitations.”
The sale of trigger leads by the credit bureaus to data brokers (including other lenders) without the consumer's knowledge or approval often cause consumers to be bombarded with hundreds of calls that confuse consumers and seek to lure them away from their chosen lenders.
A similar piece of legislation was released in June 2023 in the House of Representatives by Reps. John Rose and Ritchie Torres, the Protecting Consumers from Abusive Mortgage Leads Act, which would also ban trigger leads except in limited circumstances.
Mortgage Bankers Association (MBA) President and CEO Robert D. Broeksmit, CMB, released the following statement supporting the Homebuyers' Privacy Protection Act:
“MBA and its members have led the industry in advocating for legislative reforms to stop the unwanted harassment of consumers resulting from trigger lead abuses. We commend Senators Jack Reed and Bill Hagerty for introducing the Homebuyers Privacy Protection Act to protect consumers while preserving the legitimate use of trigger leads in appropriately narrow circumstances during a real estate transaction. We will advocate for this important bipartisan Senate bill, along with the Protecting Consumers from Abusive Mortgage Leads Act (H.R. 4198) introduced earlier this year and led in the House by Reps. John Rose and Ritchie Torres, to be passed into law as soon as possible.”
The Protecting Consumers from Abusive Mortgage Leads Act prohibits a consumer reporting agency from furnishing a trigger lead unless the third party certifies to the consumer reporting agency that the third party has a current relationship with the consumer. The bill was tailored to give consumers more control over the information they receive as part of the homebuying process and eliminates trigger lead abuses while preserving their use in appropriately limited circumstances.
Valerie Saunders, President of the National Association of Mortgage Brokers (NAMB), also showed support for the Homebuyers Privacy Protection Act, "NAMB is honored to continue working with members of Congress on the Homebuyers' Privacy Protection Act as this critical legislation will help many people across the nation to end this terrible practice that places undue hardships on consumers, mortgage professionals and the entire marketplace. NAMB and its members have been working on this issue for the past three congresses. We are encouraged by the expanded interest in this issue by Senators Reed and Hagerty, as well as members of the House of Representatives."