Credit bureaus will push to scale back mortgage trigger leads bill

The passage of the mortgage trigger lead bill as proposed in the U.S. Congress will face a challenge from a new plan expected to be released this week by representatives of the consumer reporting industry, HousingWire has learned.

In September, Senate Armed Services Committee Chairman Jack Reed (D-R.I.) included U.S. Senate Amendment 2358 — known as the Homebuyers Privacy Protection Act of 2024 — in the Senate’s Fiscal Year 2025 National Defense Authorization Act (NDAA).

The amendment addresses mortgage trigger leads, which occur when a potential borrower’s credit score is pulled for a new home loan application and credit bureaus sell the data to other companies interested in reaching the customer. The practice is legal, but customers often report receiving hundreds of calls, texts and emails. 

Post-election uncertainties have cast doubt on whether the amendment will be approved and attached to the NDAA. Meanwhile, lobbyists for consumer credit reporting companies, led by the Consumer Data Industry Association (CDIA), are working to change the language of the legislation to a more limited version, according to sources. 

Under the new text, reviewed by HousingWire, companies could only solicit consumers by telephone if they are the current mortgage originator or loan servicer. But the proposal permits “written offers” via mail, email or text message from any company that receives a mortgage lead. The proposal introduces a two-year implementation period before the rules take effect.

This approach contrasts with the current version in the NDAA, which prohibits all forms of solicitation — including calls, mail, email or text — except when authorized by the consumer, transitioning from an “opt-out” to an “opt-in” model. This version also permits solicitations initiated by the mortgage originator and servicer, and by insured depository institutions and credit unions with active consumer accounts.  

The CDIA told HousingWire in a statement that “mortgage lenders should not inundate consumers with unwanted telephone solicitations.”

“The industry proposal does not address the underlying problem of telephone solicitations.  We believe any legislative solution should address the root cause — telephone calls — and maintain a competitive market that allows the consumer to shop for a better deal. When shopping for a mortgage this can mean saving thousands of dollars and helping people afford the right home for them,” the CDIA said in the statement.

The statement goes on to say that “current law requires the lender to provide the consumer an opt out notice in written offers if they do not want to receive prescreened offers.” They can also do so by visiting www.optoutprescreen.com.”

A spokesperson for Reed’s office told HousingWire that “CDIA tacitly acknowledges that the phone calls are a nuisance and should be prohibited.” But they disagree with revisions to his amendment.

“Senator Reed’s language has bipartisan momentum because it will better protect consumers and this eleventh hour alternative doesn’t go far enough,” his spokesperson said.

Mortgage trade groups have expressed concerns, arguing that the change in the bill’s language exposes consumers to harassment through emails and text messages. They note that while these channels allow consumers to respond at their convenience and are less intrusive, they still fall short of adequately protecting privacy.

Bill Killmer, chief lobbyist for the Mortgage Bankers Association (MBA), said that the trade group “appreciates that the credit bureaus finally are acknowledging that invasive trigger-leads phone calls from unknown callers need to stop.”

But Killmer added that “the bipartisan bill currently under consideration, the MBA-supported Homebuyers Privacy Protection Act, is the best way to appropriately curtail the abusive use of trigger leads and limit their usage. Additionally, consumers in any proposal shouldn’t have to wait for years until the harassment ends.”  

“We had heard for some weeks that there might be compromised language,” Rob Zimmer, external affairs consultant at the Community Home Lenders of America (CHLA), said about the amendment added to the NDAA. “If the compromise severely waters down the consumer privacy protections, we wouldn’t be for that.” 

Zimmer said lenders associated with CHLA and its borrowers are irritated by phone calls and “all kinds of texts and emails.” This means less stringent requirements “would not be a material improvement in consumer privacy and what our customers call harassment.”  

Editor’s note: This story has been updated with a statement from Sen. Jack Reed’s office.