Both the Senate and the House of Representatives in the federal Congress have now passed a bill limiting the ability of lenders to use what has come to be called “trigger leads”. Trigger leads are often used by lenders to alert the lender to an inquiry a person has made with another lender. These leads are useful to lenders because they alert the lender that the consumer is actively seeking new mortgage credit.
There has been activity across the country to attempt to limit the use of trigger leads to protect consumers and their ability to seek credit without initiating the frequent, unsolicited contact from potential lenders that comes from the use of trigger leads. We recently discussed this activity in an article here including new rules passed by Texas to limit their use.
In the last Congress, the Senate passed Senate Bill 3502 to amend FCRA and restrict the ability of consumer reporting agencies from providing consumer reports that are trigger leads. However, the House did not pass the bill before the end of the last Congress so the bill would have to be passed by both houses again in a new Congress. Now that the new Congress has passed a version of the trigger leads bill, because of slight differences between the bills, the two houses will confer on those differences and must agree on the text for a final bill, which they then must pass again. Once the same text has been passed by both houses, the bill can proceed to the president for signature and enactment.
The bill modifies FCRA in restricting the ability of a person to obtain a consumer report that is the result of a trigger lead. Any such person will only be able to obtain a consumer report if the transaction involves a firm offer of credit or insurance, and either the person has authorization from the consumer, has an existing account relationship with the consumer, is the servicer of the consumer’s mortgage or is a bank or credit union.
DocMagic will continue to monitor developments of the trigger leads bill and developments around the country. Should you have any questions please feel free to contact DocMagic’s Compliance department.