Trigger lead reform axed from NDAA spending package

The trigger leads bill was removed from the National Defense Authorization Act, leaving the measure's fate in limbo once more.

Along with several other provisions, the reform measure was excluded from the current NDAA package, according to a post by the Broker Action Coalition on Wednesday.

The BAC pointed the finger at credit bureaus for fighting against the legislation, but noted the mortgage industry would not give up in getting the bill across the finish line next year.

"Over the last two years, the credit bureaus have engaged in practices that can be described as nothing other than price-gouging," wrote BAC. "Are credit bureaus powerful? Yes. Are they well funded? Sure. Are they more powerful than all of us together? No, not even close. The mortgage industry is tenacious and will come back in 2025 to fight for this legislation even stronger."

The current version of the trigger leads bill prohibits the sharing of a credit report pulled for a mortgage loan without the consumer's consent. It also allows the report to be shared with the current mortgage lender or servicer of an existing loan. The bill includes an exemption for banks and credit unions.

In mid-November, uncertainty grew among stakeholders about whether the legislation would be included in the omnibus military spending bill, which has become a vehicle for legislative ideas with bipartisan support but insufficient momentum to pass as standalone measures.

The reason for said uncertainty stemmed from murmurs that the bill would be pared down and that Rep. Patrick McHenry R-NC, the committee chair of the House Financial Services Committee, was hesitant about the legislation because it was "too restrictive."

Either way, trade groups such as the Mortgage Bankers Association, BAC and the Community Home Lenders of America vowed to get the bill passed this year or next.

"MBA will keep working with our congressional allies to explore any remaining options to get this important, bipartisan bill considered in the final days of the current session," wrote Bill Killmer, chief lobbyist for the trade group. "If that doesn't occur, we will work aggressively to advance this needed change to mortgage credit trigger leads policy with other stakeholders next year.  In the short term, we will be disappointed that consumers who remain vulnerable to trigger leads abuses won't realize relief heading into the spring homebuying season."

The original bill, the Homebuyer Privacy Protection Act, was introduced in the Senate last December by Jack Reed, D-RI, and has 43 co-sponsors from both parties, including Bill Hagerty, R-TN as the original co-sponsor. An identical piece of legislation was introduced in the House of Representatives by John Rose, R-TX as the lead sponsor and 10 original co-sponsors. Both pieces of legislation languished until an iteration was added to the omnibus military spending bill. 

All in all, the trigger leads bill brought together over 130 legislators to support the cause. "Not only did we help garner bipartisan support, but there are co-sponsors on the bill who have never agreed on anything else in their careers," BAC said. "The fight continues."