Triggered Leads Bill included in National Defense Legislation

09/25/24

The OBL has been advocating for legislation to address what we see as an abusive practice coming out of the credit bureau agencies. The Homebuyers' Privacy Protection Act was introduced earlier this year, and your association has been working hard to get it attached to anything that could possibly get through Congress. When a consumer applies for a mortgage, the lender with whom the consumer applied pulls a credit report to evaluate their application. When the report is pulled, credit agencies then identify that the consumer is looking for credit and can sell the consumer's information to other lenders (so-called "trigger leads"). While this "trigger lead" activity is legal under the Fair Credit Reporting Act (FCRA), consumers are increasingly frustrated with unsolicited calls for credit products, and it can damage banks' relationships with customers as the customer often mistakenly assumes that their financial institution sold their credit report.

The Homebuyers' Privacy Protection Act would amend the Fair Credit Reporting Act to prohibit credit reporting agencies from selling trigger leads in certain circumstances. Under the bill, 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. OBL 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.

The Legislation cleared a significant hurdle this week when it was included in the managers amendment to the National Defense Authorization Act (NDAA). The manager's amendment is normally a list of non-controversial additions to the bill negotiated between the lead Senate Republican and Democrat authors of the legislation. Based on this development we can generally assume the triggered leads prohibition will be in the version of the NDAA that passes the Senate and is sent over to the House. Final passage of the NDAA will come down to a negotiation between the House and Senate version of the bill in lame duck after the election. During lame duck, the OBL will be working to advocate to the House negotiators on the NDAA to keep the triggered leads legislation in the final bill.