Trigger lead legislation reintroduced in Congress

Trigger lead legislation was reintroduced in the House and Senate Thursday, signaling that a nationwide ban could be near.

A measure to prohibit credit bureaus from selling consumer data when mortgage credit reports are pulled came close to passing late last year, but was ultimately stripped from the National Defense Authorization Act at the last minute. 

Rep. John Rose, R-Tenn., and Ritchie Torres, D-N.Y., introduced a version of a trigger lead bill in the House, while Sen. Jack Reed, D-R.I., and Sen. Bill Hagerty, R-Tenn., reintroduced the bill in the Senate.

The House bill bans trigger lead abuses, but makes exceptions for the current lender, mortgage servicer or bank with which a consumer is working. 

Mortgage industry stakeholders applauded the renewed push to rein in trigger leads.The Mortgage Bankers Association called the bills "common-sense legislation," which will curb abuses, while preserving value in "appropriately limited circumstances."

"We commend trigger lead reform champions Senators Bill Hagerty (R-TN) and Jack Reed (D-RI) and Reps. John Rose (R-TN) and Ritchie Torres (D-NY) for their leadership, as well as the large bipartisan group of lawmakers for co-sponsoring the reintroduction of these companion bills," said Bob Broeksmit, CEO of the MBA Thursday. "We will continue to advocate for House and Senate leaders to pass these measures into law as soon as possible."Scott Olson, head of the Community Home Lenders of America, said his organization "strongly supports this legislation." 

"There is a near universal consensus that consumers that don't want to receive an avalanche of abusive trigger leads, texts, phone calls and emails should not receive them," said Olson in a written statement. "We are hopeful that since the Senate has passed this provision twice, the third time will be a charm."

Last year, some stakeholders, including the Broker Action Coalition, pointed fingers at the credit bureaus for exerting a significant influence on trigger lead reform being stalled.Ahead of the introduction of the two bills, some allege that letters have been circulating from the bureaus urging a hold off an all-out trigger lead ban and instead suggesting more discourse that will result in the consumer benefitting.

Meanwhile, on a state level, efforts to protect consumer data have revved up.

In March, Idaho signed a bill enforcing trigger lead transparency, cementing the efforts of a local loan officer who introduced the bill. The bill requires trigger lead solicitors to give disclosures to consumers.

Texas also moved to increase trigger lead disclosures. The Texas Department of Savings and Mortgage Lending as of late 2024 enforced more stringent requirements for home lenders relying on trigger leads to find clients.