Idaho passes trigger lead bill as national ban is brewing

The governor of Idaho has signed into law a bill enforcing trigger lead transparency, cementing the efforts of a local loan officer who introduced the bill.

State Rep. Chris Bruce, a first-term Republican representing Idaho's District 23, introduced the bill in February. State Sen. Brian Lenny, a Republican representing District 13, was the sponsor in the state senate, according to Bruce. The bill, which requires trigger lead solicitors to give disclosures to consumers, quickly moved through the state legislature before being signed into law last week. 

Idaho-based loan officers this week applauded the move, echoing widespread industry concerns over privacy and spammy behavior. While the Idaho bill's specifics fall short of an outright trigger lead ban, the bill's sponsor, also an LO with Premier Mortgage Resources, said he's received calls from lawmakers in other states mulling similar moves. 

"With the Fair Credit Reporting Act, we can't ban it at the state level," said Bruce. "But what we can require is for (solicitors) to disclose who they are. When it all comes down to it, it's just to protect the consumer."

The bill's passage was first reported by MPAMag.

Idaho House Bill No. 149 states callers must clearly disclose their lack of affiliation with the mortgage originator whom a customer originally applied with. Callers must also tell consumers that their personal information was purchased from a credit reporting agency without the original lender or broker's knowledge or permission. 

Industry advocacy groups recently sought an amendment to the federal FCRA, which would have limited trigger leads to lenders with closer relationships with consumers. According to the Broker Action Coalition, that effort very narrowly missed passage in a December continuing resolution. 

Local originators shared anecdotes of customers getting slammed with trigger leads, which creates confusion and other unwanted outcomes. 

"If you get to a soft (credit) pull at the end, you find out they've applied for mortgages in other places," said Bruce. "Depending on whether it hurts their score or not, that can actually kill a deal."

The new law which goes into effect July 1 still allows a consumer to engage with the solicitor, provided they share required disclosures. Violators would run afoul of the state's consumer protection act, according to the text, and Bruce said the state attorney general would determine punishments.

Joseph Pattee, a branch manager at Guild Mortgage and president of the Idaho Mortgage Lenders Association, said the state bill will help "demystify" what's happening from the consumer's point of view. He believes the bill will decrease the amount of trigger lead calls, but doesn't believe it'll eradicate them.

"I think they'll probably deliver some scripts to be able to comply with the law," said Pattee.

Gerald Robinson, a broker and owner at 1st Choice Mortgage Company in Meridian, Idaho, suggested it would take consumer complaints to start piling up for the state regulator to "get some teeth into this."

Larger efforts

Texas passed a similar trigger lead disclosure law in December, and more states are mulling similar actions, LOs  said. Robinson said the current political climate could drive further action. 

"We're seeing less and less government with the current administration," he said. "So it may take the states to start enforcing and protecting consumers more so than they have in the past."

Last year's Homebuyer Privacy Protection Act passed in the Senate unanimously before failing at the last minute in the U.S. House of Representatives, members of the Broker Action Coalition, including Robinson, the group's Federal Government Affairs Leadership Chair, said. 

Of 130 bipartisan cosponsors of the bill, 123 were reelected, said Brendan McKay, chief advocacy officer & co-founder of BAC and owner and senior loan officer of Maryland-based McKay Mortgage. BAC said it's spoken to new members of Congress' financial committees, and cites strong support from House Financial Services Committee Chair French Hill, R-Ark. 

McKay said he anticipates Rep. Ritchie Torres, R-N.Y., and Rep. John Rose, R-Tenn., cosponsoring the next iteration of the trigger lead bill. The BAC previously blamed credit bureaus for killing the last bill, and McKay on Tuesday cited past public opposition by the Consumer Data Industry Association. 

"Frankly trigger leads are not the problem, they're a symptom of the problem," said McKay. "The problem is that credit bureaus are allowed to sell consumer data without their permission, and that's wrong."

The CDIA didn't respond to a request for comment Tuesday. 

McKay meanwhile cheered state efforts to promote solicitor disclosures, stating many callers use deceptive tactics to avoid disclosing who they are. 

"I think we should come up with a federal solution," said McKay. "But I love attacking the problem from as many angles as humanely possible."