Senate Passes Trigger Leads Bill, Measure Heads To House

The Senate on Tuesday approved the trigger leads bill, which limits the use of “abusive“ digital marketing tools to reach potential borrowers. Mortgage trade groups commended the passage of the bipartisan legislation known as the Homebuyers Privacy Protection Act (S. 3502).

The bill has been sent to the House of Representatives, which has two days to approve the legislation before its winter recess.

There was little hope that the bill would be approved by the Senate this year after members of Congress removed it from the Senate’s fiscal year 2025 National Defense Authorization Act (NDAA) earlier this month.

Post-election uncertainties cast doubt on whether the amendment would be approved and attached to the NDAA. In September, Senate Armed Services Committee Chairman Jack Reed (D-R.I.) and ranking member Roger Wicker (R-Miss.) included it in the military spending bill.

“We commend Senators Jack Reed (D-RI) and Bill Hagerty (R-TN), as well as the bill’s 42 bipartisan cosponsors, for their leadership in introducing and passing this important bill, and we implore the House of Representatives, which has more than 90 bipartisan cosponsors of the bill, to pass it during the remaining days of the current Congress,” Bob Broeksmit, president and CEO of the Mortgage Bankers Association (MBA), said in a statement. 

“Consumers remain vulnerable to trigger leads abuses heading into the spring homebuying season. Absent a House vote this week, MBA plans to work aggressively with industry stakeholders and members of the 119th Congress to advance this needed change to trigger lead policy as soon as possible.” 

Trigger leads are not illegal but often result in potential borrowers receiving a flood of unsolicited calls, texts and emails. This happens when a credit score is pulled for a mortgage application, and credit bureaus sell this data to companies that want to contact the borrower. 

The bill, which passed with no changes in the Senate, prohibits credit reporting agencies from providing information unless the borrower gives consent, or if the third party originated the mortgage, is the current loan servicer or has a current specified banking relationship with the consumer.

In November, credit bureaus advocated for a softer version of the legislation to allow for “written offers“ from any company receiving a mortgage lead while significantly restricting phone calls. 

In a statement, the National Association of Mortgage Brokers (NAMB) said the Senate bill ensures the right to privacy that works in harmony with similar legislation pending in the House and co-sponsored by Reps. John Rose (R-Tenn.) and Ritchie Torres (D-N.Y.).

“Trigger leads exploit consumers’ financial inquiries, turning them into commodities sold without consent,” NAMB President Jim Nabors said.

“It is not unusual for bank customers to receive 100+ misleading texts, phone calls, and emails within the first 24 hours of applying for a mortgage, and the passage of this bill will go a long way in relieving this burden to homebuyers. We must empower homebuyers, not bombard them with predatory calls.”

The Community Home Lenders of America (CHLA) urged the House to pass the measure this week before leaving Washington.

“CHLA has been warning Washington for over two years that this part of the mortgage business needs drastic reform to protect American families from unwanted spam,” Scott Olson, CHLA’s executive director, said in a statement. “This is a giant step forward, and we urge the House to do its part to make this reform a reality.”