Proposed legislation would curtail trigger leads

Sens. Jack Reed (D-R.I.) and Bill Hagerty (R-Tenn.) recently introduced the Homebuyers’ Privacy Protection Act (S.3502), which would amend the Fair Credit Reporting Act to prohibit credit reporting agencies from selling trigger leads in certain circumstances. Trigger leads are a marketing product sold by credit bureaus containing contact information for consumers who have had a credit report pulled while in the process of shopping for a mortgage loan.

A consumer reporting agency would not be able to furnish a trigger lead to a third party unless: the third party certifies to the consumer reporting agency that the consumer has authorized the solicitations; or the third party certifies it has originated the consumer’s current residential mortgage loan, is the servicer of the consumer’s current residential mortgage loan, or is an insured depository institution or insured credit union and holds a deposit account for the consumer to whom the consumer report relates.

Similar legislation was introduced in the house in June by Reps. John Rose (R-Tenn.) and Ritchie Torres (D-N.Y.): the Protecting Consumers from Abusive Mortgage Leads Act (H.R. 4198). Though seeking similar outcomes, the Senate and House proposals are not identical.

In the House legislation, Section 604 of the FCRA would be amended to: “If a person requests a report from a consumer reporting agency in connection with a credit transaction involving an extension of credit secured by real estate, such agency may not, solely on the basis of such request, furnish a report to a third party unless such third party has submitted documentation to such agency certifying that such third party has the consumer’s consent or has a current relationship, relating to credit, servicing or other financial services, with such consumer.”

ABA supports the effort to eliminate the abusive use of trigger leads and will continue to advocate for properly tailored provisions that preserve banks’ legitimate use of trigger leads in appropriately narrow circumstances.