President Expected to Sign Bill to Rein In Mortgage ‘Trigger Leads’

Over the weekend the Senate by voice vote passed H.R. 2808, the House version of the Homebuyers Privacy Protection Act, sending the bill to President Trump for signature. The bill is led by Reps. John Rose (R-TN) and Ritchie Torres (D-NY) in the House and Sens. Jack Reed (D-RI) and Bill Hagerty (R-TN) in the Senate. The bill will take effect 180 days after being signed into law. It will amend the Fair Credit Reporting Act to prohibit the sale of “trigger leads” to mortgage brokers, originators and other third parties unless certain circumstances apply.

Specifically, under the bill, trigger leads cannot be shared with a third party unless that third party is making a firm offer of credit or insurance and:

• The consumer has consented to receive the offer;
• The third party is the originator or servicer of the consumer’s existing mortgage; or
• The third party is a bank or credit union that has a relevant existing banking relationship with the consumer.

The Consumer Financial Protection Bureau (CFPB) has jurisdiction over the Fair Credit Reporting Act (FCRA) with regard to rulemaking and enforcement authority. The legislation, however, does not provide any additional authorities to the CFPB, or require a rulemaking from it. Notably, the CFPB has in the past aligned with efforts to target abusive actions related to trigger leads.

In a memo to CFPB staff, Chief Legal Officer Mark Paoletta noted that the CFPB, “will focus on ‘actual fraud’ and ‘tangible harms’ to consumers.” He further noted that mortgages will be the CFPB’s highest priority. While the Trump administration CFPB has not formally weighed in on this legislation, the bipartisan support combined with a focus on actual harm, could mean that they will prioritize any violations of these new requirements in future months.

The legislation received the support of a wide range of organizations, including America’s Credit Unions, the American Bankers Association, Mortgage Bankers Association, Center for Responsible Lending and National Association of Attorneys General, among many others. Having now passed the House and Senate by voice vote, with no members of Congress objecting to its passage, President Trump is expected to sign it into law in the next several days.

THIS DOCUMENT IS INTENDED TO PROVIDE YOU WITH GENERAL INFORMATION REGARDING MORTGAGE “TRIGGER LEADS”. THE CONTENTS OF THIS DOCUMENT ARE NOT INTENDED TO PROVIDE SPECIFIC LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS ABOUT THE CONTENTS OF THIS DOCUMENT OR IF YOU NEED LEGAL ADVICE AS TO AN ISSUE, PLEASE CONTACT THE ATTORNEYS LISTED OR YOUR REGULAR BROWNSTEIN HYATT FARBER SCHRECK, LLP ATTORNEY. THIS COMMUNICATION MAY BE CONSIDERED ADVERTISING IN SOME JURISDICTIONS.