The proposed bill that would prohibit the sale of trigger leads has been embraced by the National Association of Mortgage Brokers (NAMB), a group that advocates for the concerns of independent mortgage loan originators and medium-sized mortgage enterprises.
On April 17th, Representative Richie Torres from New York presented H.R. 2656, a bill that would amend the Fair Credit Reporting Act and forbid the generation and distribution of trigger leads – an issue that the National Association of Mortgage Brokers (NAMB) has been advocating for since at least 2018. According to Ernest Jones Jr., NAMB’s president, this legislative measure would provide overdue relief to both consumers and the mortgage industry by terminating the perilous practice of trigger leads.
When a consumer applies for a mortgage, a trigger lead is generated. This happens when the mortgage company makes an inquiry to the credit bureau, signaling that the consumer is interested in obtaining financing. The credit bureau, which can include Experian, TransUnion, and Equifax, then sells the trigger lead to data brokers, which can include rival mortgage companies, without the consumer’s awareness or consent.
These leads contain details such as names, contact information, and other data, which can include a substantial amount of personal information about individuals who have recently applied for a mortgage.
After purchasing these trigger leads, competing companies may then reach out to consumers, causing confusion for borrowers and potentially leading them to provide personal information that they did not intend to share with other lenders.
Under H.R. 2656, no consumer reporting agency would be permitted to furnish a consumer report for a credit transaction that was not initiated by the consumer.
The Consumer Data Industry Association (CDIA) conveyed to HousingWire that expanding consumers’ options during a time when housing prices and interest rates are high can help them find affordable homes.
While it is still early in the process before the bill is passed into law, the Mortgage Bankers Association (MBA) views it as a positive beginning.