WASHINGTON—Sens. Jack Reed (D-RI) and Bill Hagerty (R-TN) have 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.
In announcing the legislation, the senators noted that when a mortgage lender runs a credit check during the process to buy a home, the major credit reporting bureaus may then sell that information to other lenders or brokers, who may then use it to contact consumers unprompted, “often in a predatory manner,” to solicit business.
‘No Idea’
Prospective homebuyers often have no idea that their information was sold without their consent, the senators 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 in a statement. “The Homebuyers Privacy Protection Act will put consumers back in the driver’s seat and help cut down on the spam.”
What Bill Would Do
The 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.
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.
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.
