Trigger lead ban nears finish line in Congress

After several starts and stops, the trigger leads ban is the closest it's ever been to becoming law, after the House of Representatives approved its version of the Homebuyers Privacy Protection Act.

There are some differences with the Senate version of the bill, which was approved by unanimous consent on June 12. Those can be resolved either in a conference committee or by the Senate voting to approve the House version, explained Brendan McKay, president of advocacy at the Broker Action Coalition. 

"Tonight's House vote marks another significant step forward for the trigger lead bill, and we're encouraged by the continued momentum," McKay said in a statement.

"But our work isn't done yet. A small technical discrepancy between the House and Senate versions must still be resolved before this becomes law."

The Community Home Lenders of America has been an advocate for the ban, praised the vote. The legislation would prohibit credit bureaus from selling a consumer's information to other lenders after a credit inquiry, unless the consumer gives explicit consent.

"CHLA is thrilled that the trigger lead legislation has passed the House and is that much closer to becoming law," said Scott Olson, executive director, in a statement.

"For groups like CHLA that support streamlined, smarter regulation, proactive steps like this — advocating for cleaning up industry practices like abusive trigger leads — are important in building credibility in pursuing that objective."

What makes the House bill different from the Senate version

When the bill was in the House Financial Services Committee, a requirement for a General Accountability Office study on the value of text message trigger leads was added, said a letter sent to House leaders in both parties by the Mortgage Bankers Association the morning of the vote.

That language is not part of the Senate bill.

The MBA urged the House to pass the legislation, known as H.R. 2808, and said it would also support the Senate version, S. 1467, if brought to a vote.

"After two years of unrelenting advocacy efforts, MBA and its members are more optimistic than ever that the abusive use of mortgage credit trigger leads is close to an end," MBA President and CEO Bob Broeksmit said in a post-vote statement.

"MBA will continue to work with the sponsors and congressional leadership in both chambers to reconcile the minor differences between the two bills so that one bill can be passed and signed into law as soon as possible."

The Independent Community Bankers of America pointed to a recent poll which said 63% of adults supported preventing the sale of information about home loan applicants.

"ICBA and the nation's community bankers applaud the House and Senate for swiftly passing their versions of the Homebuyers Privacy Protection Act, which will give consumers more control over their private financial information and shield them from unwanted solicitations," ICBA President and CEO Rebeca Romero Rainey said in a statement. 

"We look forward to final passage of this important bipartisan legislation to restrict the sale of trigger leads and support the privacy of U.S. consumers," he added.

The House version cleared the Financial Services Committee on a 46-0 vote, McKay noted.

"No matter which organization you're aligned with — BAC, MBA, NAMB (the National Association of Mortgage Brokers) or otherwise — stay engaged and ready to act," McKay continued. "It will take a full-industry push to get this across the finish line."

Once the differences are ironed out, the bill will then move to Pres. Trump's desk, where he is expected to sign it.

Why hasn't the trigger leads bill passed before now

Last fall, it looked like the ban would be approved by Congress as it was included in one of the Senate's budget bills, the National Defense Authorization Act. At the end of the day, however, it was removed, with supporters pointing to lobbying from the credit bureaus.

The 2024 version of the act languished as a piece of standalone legislation, as had past efforts, even with support from both sides of the aisle. The inclusion in the NDAA was seen by supporters as the way to finally get the bill passed.

Not giving up, supporters from both parties brought the Homebuyers Privacy Protection Act back to the floor in each house in April. The renewed push did make some adjustments to the legislation, McKay noted.

What the consumer reporting industry said about the bill

The Consumer Data Industry Association said the legislation would hurt mortgage applicants' ability to get a lower interest rate.

"Mortgage lenders should not inundate consumers with unwanted telephone solicitations," CDIA CEO Dan Smith said in a statement. "We believe that the U.S. Congress is best positioned to address the root cause — telephone calls — while maintaining a competitive market that allows consumers 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."

After the House did its markup on the bill, on June 9 the CDIA sent a letter to Rep. Young Kim, R-Calif., expressing disappointment that certain concerns raised with her were not included in the legislation.

That included restrictions on outbound calls and clearer consumer disclosures combined with targeted enforcement of existing laws.