Real estate finance professionals welcomed the reintroduction of legislation in the House and Senate aimed at eradicating the use of trigger leads in the real estate marketplace. The bills are the latest in a long series of bipartisan attempts to do so over the past half decade.
Language banning the use of trigger leads had been included in an early draft of the Senate’s Fiscal Year 2025 National Defense Authorization Act (NDAA) in September last year but subsequently excluded from the final version, despite bipartisan support from lawmakers and advocacy by financial services trade groups and consumer advocates.
“MBA has worked closely with industry stakeholders and a large, bipartisan group of lawmakers in the House and Senate to push for action that ends the abusive use of mortgage credit leads,” Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit said in statement. “Consumers remain vulnerable to trigger leads abuses, and we believe strongly that this common-sense legislation will curb the practice while preserving its value in appropriately limited circumstances.”
The bills are sponsored by Sens. Bill Hagerty (R-Tenn.) and Jack Reed (D-R.I.) and Reps. John Rose (R-Tenn.) and Ritchie Torres (D-N.Y.).
Congress has demonstrated its ability to move relatively quickly on partisan measures under both the Trump and Biden administrations. However, multiple bills seeking to ban trigger leads have been introduced since at least 2020, yet none have been voted on by both chambers and signed into law at the time of this writing, despite persistent support from real estate professionals and lawmakers on both sides of the aisle.
In January 2020, Rep. Lacy Clay (D-Mo.) introduced H.R. 5720 with the aim of amending the Fair Credit Reporting Act (FCRA) to prohibit credit reporting bureaus from selling information about consumers with a credit inquiry regarding a home mortgage loan without the consumer’s consent. The bill had no cosponsors and never made it past the House Financial Services Committee’s (FSC) desk but received expressed support from the National Association of Mortgage Brokers (NAMB), among other industry advocates.
Two years later, Torres – one of the sponsors of the latest legislative effort to ban trigger leads – introduced H.R. 7661, the “Trigger Leads Abatement Act of 2022,” proposing to prohibit the sale of consumer data to be used as trigger leads to a third party absent a pre-existing relationship with the consumer. Again, the legislation received expressed support from the real estate finance sector and, again, the measure failed to receive a committee vote.
The same thing happened when Torres tried again in 2023 with H.R. 2656. That time, he accumulated six cosponsors – one Republican and five Democrats – along with support from MBA, NAMB, the Independent Community Bankers of America and other trade organizations.
Consumer advocacy groups, which are often at odds with financial services lobbyists, also have expressed strong support for measures outlawing trigger leads, including the Consumer Federation of America (CFA) and the Center for Responsible Lending (CRL).
In June 2023, months after Rep. Patrick McHenry (R-N.C.) took over for Rep. Maxine Waters (D-Calif.) as chair of the FSC, Torres teamed up with Rose as one of 10 cosponsors – seven Republicans and three Democrats – on H.R. 4198, the “Protecting Consumers from Abusive Mortgage Leads Act,” to try a third time to ban trigger leads.
Even with new leadership in the FSC and the combined support of Republicans, Democrats, financial services advocates, consumer advocates and others, H.R. 4198 sat idle in committee for the remainder of the 118th Congress.
In December 2023, the matter saw the light of day in the Senate when Reed and Hagerty introduced S. 3502, the “Homebuyers Privacy Protection Act” with 43 cosponsors representing both major political parties. At the same time, a companion bill sponsored by Torres and Rose was introduced in the House under the same name.
The Senate Banking Committee held a hearing on the measure in March 2024, discharging it to the Senate floor in December of that year where it passed by unanimous consent and moved on to the House where, similar to H.R. 4198, it sat idle for the rest of the 118th Congress.
An amended version of the legislation’s text was subsequently added to the NDAA, eliciting excitement from the bill’s supporters only to be met with disappointment when it was later nixed from the massive, contentious budget measure.
Persistent proponents of outlawing trigger leads will now hope for a different outcome with the latest effort to do so with S. 1467.