The passage of the mortgage trigger bill as proposed in US Congress may face a challenge from a new plan expected to be released this week by consumer reporting industry representatives, HousingWire you are educated.
In September, Senate Armed Services Committee Chairman Jack Reed (DR.I.) also introduced US Senate Amendment 2358 – known as the Homebuyers’ Privacy Protection Act of 2024 – into the Fiscal Year’s 2025 National Defense Authorization Act (NDAA).
This amendment addresses mortgage trigger tracking, which occurs when a potential borrower’s credit score is pulled for a new mortgage application and credit bureaus sell the data to other companies interested in reaching the customer. The practice is legal, but customers often report receiving hundreds of calls, texts and emails.
The post-election uncertainty has raised doubts about whether the amendment will be approved and attached to the NDAA. Meanwhile, lobbyists at consumer credit reporting companies, led by Consumer Data Industry Association (CDIA), are working to change the language of the law to a limited version, according to sources.
Under the new document, reviewed by HousingWire, companies can only solicit buyers over the phone if they are a current mortgage originator or loan servicer. But the proposal allows for “written contributions” by mail, email or text message from any loan origination company. The proposal introduces a two-year grace period before the rules come into force.
This approach is contrary to the current version in the NDAA, which prohibits all forms of solicitation – including calls, email, e-mail or text – unless authorized by the consumer, changing from the “opt-out” model to the “opt-in” model. This version also allows requests initiated by the loan originator and user, as well as insured depositories and credit unions with active consumer accounts.
The CDIA told HousingWire in a statement that “mortgage lenders should not inundate buyers with unwanted phone calls.”
“The industry proposal does not solve the existing problem of soliciting calls. We believe that any legal solution must address the root cause – telephone calls – and maintain a competitive market that allows the consumer to shop for the best deal. If you buy a loan, this can mean saving thousands of rands and helping people to buy the right home for them,” CDIA said in a statement.
The statement goes on to say that “current law requires the lender to give the buyer written notice of withdrawal if they do not want to receive a pre-screened offer.” They can also do that by visiting www.optoutprescreen.com.”
Mortgage trade groups have expressed concern, saying the bill’s language changes expose consumers to harassment via emails and text messages. They note that while these channels allow consumers to respond in a way that allows them to and is less intrusive, they still fail to adequately protect privacy.
Bill Killmer, chief lobbyist Mortgage Bankers Association (MBA), said the trade group is “very grateful that the credit bureaus finally agree that harassing calls from unknown callers must stop.”
But Killmer added that “a bipartisan bill currently under consideration, the Homebuyers-backed MBA Privacy Protection Act, is the best way to effectively reduce the misuse of trigger points and limit their use. Additionally, buyers for any proposal should not wait years until it expires.” torture.”
“We’ve been hearing for several weeks that there may be some loosening of the language,” Rob Zimmer, foreign affairs coordinator Community Home Lenders of America (CHLA), states about the amendment added to the NDAA. “If compromises significantly reduce consumer privacy protections, we won’t be.”
Zimmer said CHLA-affiliated lenders and borrowers were annoyed by phone calls and “all kinds of texts and emails.” This means that strict requirements “will not be the development of consumer privacy and what our customers call harassment.”
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