Legislation addressing the controversial practice has been shelved, although advocacy group exec says efforts to get it back before Congress will redouble in 2025
Efforts to ban so-called mortgage “trigger leads” met a fresh setback with the removal of a bill aimed at curbing the practice from the National Defense Authorization Act (NDAA) this week – but while that marks a new bump in the road for reform advocates, the issue is far from settled for the future.
That was the message of Brendan McKay (pictured), chief advocacy officer and co-founder of the Broker Action Coalition (BAC), who spoke with Mortgage Professional America as prospects of the bill being included in the NDAA faded midweek.
He said among the BAC’s top priorities for 2025 will be getting the proposal, which aims to prevent credit bureaus being able to notify lenders as soon as a customer has applied for a mortgage, back before Congress in the new year.
While that will technically mean new legislation and a fresh bill, he believes the progress made to date on banning trigger leads will stand new efforts in good stead.
The addition of two new cosponsors before the bill was nixed this week meant over 130 members of Congress had endorsed the legislation, most of whom were re-elected in November – “and the expectation is that they would jump right back on to co-sponsor it again,” McKay said. “Because of how far along the bill got, it will shortcut some of the conversations with congressional offices next year.
“In those types of discussions, they’re relying on groups like the BAC and MBA [Mortgage Bankers Association] to bring them information to help them do their jobs and research. But they’re also trusting that we’re honest brokers – and the fact that it was attached to the Senate version of the NDAA gives the bill interesting credibility. So we do think we’ll have a massive head start right out of the gate.”
Fitting the bill back into next year’s NDAA isn’t the only way a ban on trigger leads might come before Congress in 2025, according to McKay. He said data privacy and trigger lead legislation could fit “very neatly” into a possible housing package, while the Consumer Financial Protection Bureau (CFPB) also appears to be mulling efforts to eliminate or severely limit credit bureaus’ ability to sell consumer data to data brokers.
“The credit bureaus should be ashamed of themselves”
Recent weeks saw high-profile attempts by the Consumer Data Industry Association (CDIA), which advocates on behalf of credit bureaus, to change the bill, including altering exceptions and pushing back its proposed effective date.
McKay criticized those efforts and said they were an outlier in an otherwise united industry. “Whether their actions were successful or not, there was only one segment of our industry that advocated against this bill and in my opinion, there’s no justification for them pushing against it – other than greed at the bottom line,” he said.
“A lot of times, the conversation about this legislation starts with the results rather than what the root problem is. Credit bureaus are able to sell consumer data without their permission. That’s wrong and there’s no argument for justifying it. The credit bureaus should be ashamed of themselves, in my opinion.”
“We came damn close”
While disappointed, McKay hesitated to call the news a setback – and described himself as “incredibly proud” of the progress made on the trigger lead issue over a two-year period.
That serves as a testament to what the industry can accomplish when working together, he said, with the MBA having organized a coalition spanning the length and breadth of the sector. “We came damn close, and I think that’s something to not only be proud of but hold out there as an example of what we can accomplish together,” he said.
The support of bipartisan cosponsors and general consensus within the industry and consumer groups suggest that the issue is one that will remain a prominent one throughout next year, according to McKay.
“Everyone agrees that it’s a good idea, other than one group, and we’re not going to stop fighting until it’s done,” he said. “We’re close today. It might not feel like it because it’s not going to happen this Congress – but it’s closer to happening right now than it ever has been before, and we’re going to keep pushing until it gets through.”
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