Bipartisan Legislation Signed into Law to Ban Abusive "Trigger Leads" in Mortgage Industry

Strategic Insights -

Today, President Trump signed into law the Homebuyers Privacy Protection Act, a bipartisan legislation co-authored by U.S. Senators Jack Reed (D-RI) and Bill Hagerty (R-TN), which aims to ban abusive "trigger leads" in the mortgage industry. Trigger leads refer to the practice of selling mortgage applicants' data without consent, leading to a flood of unwanted calls, texts, and messages. The new law will give prospective homebuyers more control over their personal information and crack down on unfair and deceptive lending practices.

Key Takeaways:

  • The Homebuyers Privacy Protection Act targets abusive trigger leads, which involve the sale of mortgage applicants' data without consent.
  • The act aims to prevent consumers' personal information from being sold and triggering a flood of unsolicited spam credit offers.
  • The law will limit the ability of credit reporting bureaus to sell trigger leads to mortgage brokers and lenders, unless the consumer has already established a relationship with the institution or has opted-in to receive trigger leads.
  • The law will go into effect six months from today and will prohibit credit reporting bureaus from selling trigger leads without proper certification or consumer consent.
  • Currently, eight states — Rhode Island, Connecticut, Kansas, Kentucky, Maine, Texas, Utah, and Wisconsin — have some form of trigger lead restrictions in place.
  • The legislation has been cosponsored by several senators from both parties and is supported by a broad coalition of consumer advocacy groups and financial trades.

Statistics:

  • According to the National Association of Mortgage Brokers (NAMB) president Jim Nabors, 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.
  • The law aims to dramatically reduce the number of spam calls, texts, and emails from irresponsible players in the mortgage industry.
  • The legislation has been sponsored by U.S. Senators Jack Reed (D-RI) and Bill Hagerty (R-TN) and has received bipartisan support in the Senate.

Sources:

  • United States Senator for Rhode Island Jack Reed
  • President Trump
  • National Association of Mortgage Brokers (NAMB) president Jim Nabors
  • Mortgage Bankers Association
  • Independent Community Bankers of America
  • American Bankers Association
  • National Association of Mortgage Brokers
  • The Broker Action Coalition
  • Community Home Lenders of America
  • The National Consumer Law Center
  • The Consumer Federation of America
  • Americans for Financial Reform