House Financial Services Committee Approves ‘Trigger Leads’ Bill

The House Financial Services Committee has approved a bill that would restrict the use of “trigger leads” in the mortgage industry.

The committee approved H.R. 2808, the Homebuyers Privacy Protection Act in a 46-0 vote. Companion legislation has been introduced in the Senate; no action has been taken on the legislation in that body. During the last Congress, the measure passed the Senate but was not passed by the House. Sens. Bill Hagerty, R-Tenn. and Jack Reed, D-R.I. have introduced the bill in the Senate.

Trigger leads are controversial for both consumers and mortgage industry participants. When a mortgage lender orders a credit report on a consumer, the credit bureau providing the report may then alert various other mortgage lenders who have subscribed to a service of that fact, which is a good indication that the consumer is seeking a mortgage loan.

The consumer then will receive unsolicited offers from other mortgage lenders, often prompting the consumer to complain to the mortgage lender they are working with. Of course, that mortgage lender typically advises the consumer that the last thing they would do is let their competitors know that the consumer was seeking a mortgage loan.

The House and Senate legislation would amend the Fair Credit Reporting Act to prohibit consumer reporting agencies from furnishing a trigger lead except in limited circumstances.

During a June 10 markup of the legislation, Rep. John Rose, R-Tenn., the primary Republican sponsor of the bill, said he had letters from 43 state Attorneys General and 16 trade groups supporting his bill. He added the legislation has 80 cosponsors.

Rose said that there are many unscrupulous companies that contact prospective homebuyers and pose as the homebuyers’ lender. That, he said, would be illegal if his legislation was enacted. He added that the legislation would allow homebuyers to opt into receiving trigger leads and would allow contact with a lender who has a preexisting relationship with the homebuyer.

The legislation still allows competition in the mortgage market, said Committee Chairman Rep. French Hill, R-Ark. He added, however, that it establishes clear guardrails for the industry.

Ranking Committee Democrat Rep. Maxine Waters, D-Calif., said that once credit bureaus sell a prospective homebuyer’s information, the homebuyer is bombarded by companies using trigger leads. She said that is one reason she supports the legislation.

The legislation is supported by a broad group of financial trade and consumer advocacy groups, including the Mortgage Bankers Association, the Independent of Community Bankers of America, the American Bankers Association, the National Consumer Law Center, the Consumer Federation of America and Americans for Financial Reform.

MBA’s President and CEO Bob Broeksmit thanked lawmakers for including the legislation in the markup but called on Congress to enact it.

“Consumers remain vulnerable to these unwelcome trigger lead abuses,” he said. “The time is now for the full House and the Senate to pass this bill.”

The ABA sent committee members a memo in support of the bill.

During the markup, a provision was added to the bill that would require the Government Accountability Office to “carry out a study on the value of trigger leads received by text message that includes input from State regulatory agencies, mortgage lenders, depository institutions (as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)), consumer reporting agencies (as defined in section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a)), and consumers.”

As we have blogged about, it is worth noting that a number of states have enacted laws that impose restrictions on the manner in which brokers or lenders are permitted to leverage trigger leads in connection with their mortgage activities.  These laws generally prohibit engaging in unfair or deceptive practices, require compliance with the firm offer of credit provisions under the Fair Credit Reporting Act, require an express disclosure that the broker or lender has no affiliation with the borrower’s current lender, and prohibit the use of trigger leads for targeted marketing.

There are currently eight states – Connecticut, Kansas, Kentucky, Maine, Rhode Island, Texas, Utah and Wisconsin – that restrict the use of trigger leads in some fashion, with Idaho (effective July 2025) and Arkansas (effective August 2025) following along shortly.