Trigger leads bill advances to the House
The federal bill that seeks to eliminate abusive trigger leads took a major step forward this week, advancing in the U.S. House of Representatives and reigniting hopes across the mortgage industry that it could soon become law.
Yes, that's an important development for the mortgage and consumer protection landscape.
The federal bill to eliminate abusive trigger leads recently advanced in the U.S. House of Representatives, which is a significant step toward potentially becoming law. Here’s what this means:
🔍 What Are Trigger Leads?
When a consumer applies for a mortgage and a credit inquiry is made, credit bureaus can sell that information to other lenders. These are known as trigger leads. While legal, they often result in a flood of unsolicited calls or offers from competing lenders — many of which may be misleading or aggressive.
🏛️ About the Bill
The legislation seeks to ban or strictly limit the use of trigger leads unless the consumer explicitly consents. It aims to:
- Protect consumers from confusing or predatory offers.
- Curb misleading solicitations that impersonate the original lender.
- Improve privacy and control over a borrower’s financial data.
🏠 Industry Reaction
The mortgage industry and consumer advocacy groups have largely welcomed the move, arguing that trigger leads:
- Cause consumer confusion.
- Undermine trust in legitimate lenders.
- Lead to identity theft or fraud in some cases.
📅 What’s Next?
- The bill now moves to the Senate, where it will need to pass before reaching the President’s desk.
- Industry stakeholders are pushing for bipartisan support, noting the broad agreement on consumer protection.
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