Group views selling of credit data as akin to sharing medical information
The following article was written in association with AIME, the Association of Independent Mortgage Experts.
The Association of Independent Mortgage Experts (AIME) has set its sights on casting a spotlight on trigger leads toward ensuring consumer privacy.
Trigger leads occur when a borrower applies for a loan. At that point, a credit report is drawn, triggering an inquiry. Credit bureaus are then made aware the borrower is searching for a loan and can sell that information to various lenders.
The problem is that once that information is shared with others, consumers are invariably bombarded with calls from lenders seeking business. As part of its relatively nascent lobbying efforts, AIME is lending its voice to a growing chorus seeking to end – or at least substantially mitigate – the practice.
“First and foremost, it’s trying to bring more transparency to the process,” AIME’s chairman and CEO Katie Sweeney told Mortgage Professional America during a telephone interview. “There are regulations that are in place today, but they’re not enforced very well, so it creates a lot of confusion and distrust.”
The ensuing bombardment of solicitations has a varied impact on various consumer groups, she noted. “It makes the experience for the consumer a lot worse than it should be,” Sweeney said. “It gets to be incredibly overwhelming, particularly when you’re looking at consumer groups that are first-time homebuyers, or those who traditionally had less access to financial education. The impact that it has on folks that are a little bit older, or minority communities, is significantly worse than it is for some of the other consumers out there that have had more access in the past to understand how the process works.”
The aim is to ensure broader transparency into the practice, she added. “Our goal, first and foremost, is to make sure legislators understand this practice is taking place,” Sweeney said. “A lot of people are shocked to find out that this is even something that can be sold,” she said of consumers’ financial data.
She likened personal financial information to a person’s medical records, suggesting the former should be viewed in the same sacrosanct status. “I use the example that you don’t go to your doctor’s office with the expectation that your doctor is going to sell all of your test results to other people, who are then going to solicit you to buy their services or products or come to their physician’s office.”
The same expectation of privacy should be expected, she said. “You go to the doctor with the expectation that they’re going to keep your information private. This isn’t any different. You’re talking about the sale of financial information that is as private as health information is. Not only is your social security number being sold, but now they’re also selling all of your credit history and an understanding of where your financial health has been over the course of your lifetime to loan officers and lending institutions you’ve never talked to before.”
Brendan McKay, president of advocacy at AIME, echoed Sweeney’s sentiments. “It’s gone too far,” he said. “The companies that practice trigger leads as part of their business practices have just pushed it too far. Many are deceptive with the practices they use and send messages that look like they’re working with the loan officer the person has already talked to.”
Surprisingly, McKay noted, the credit bureaus – arguably the biggest offenders given their dissemination of consumer data to third parties – haven’t opposed AIME’s efforts vociferously. This has given him hope that the agencies might go along with tighter controls on the tactics.
“They’re not coming out with guns blazing,” he said. “So we can see the writing on the wall.”
While the issue of triggers leads isn’t new, the practice has been heightened of late given the softening of the housing industry, Sweeney explained. “The practice is compounded so much over the last couple of years because the market has gotten so much tighter,” she said, “So everybody is out there buying leads and trying to buy information to drum up conversations with potential clients, but those clients didn’t enter into consensual relationships with those lending institutions and loan officers. They [consumers] talk to a loan originator that they trusted, they submitted an application to get qualified for a loan and then the very next day they’re getting 100s, sometimes 1,000s, of phone calls and text messages that are not only annoying but often incredibly misleading.”
Still, AIME isn’t calling for an outright ban on the practice, Sweeney noted. “Our goal is to make sure people know it’s happening but also put forth realistic and pragmatic reasonable solutions that don’t ban the practice completely – because there are exemptions that are really important to the mortgage industry overall and quite frankly to ensure that consumers still have access to options – but there is a lot that can be done to minimize the current practice and make sure there’s more transparency.”
McKay noted that proposed legislation by Richie Torres, a New York congressman, was deemed imperfect in allowing for certain vagaries of the mortgage industry and failed to gain traction. Still, a groundswell of support for trigger leads oversight has helped spur resolve. “The last time I checked, over 2,000 of our members have sent letters to their congressional representatives on it,” he said. “We’re looking to push this train as much as possible.”
AIME’s leaders make regular treks to Washington, D.C. to meet with lawmakers on issues affecting the mortgage industry. The group took on such advocacy in earnest early last year when they secured the services of a lobbying firm to further represent its interests on Capitol Hill. Lobbying firm Forbes Tate Partners is focused on communication and engagement strategies to reach and engage key audiences, AIME officials told MPA. The group is described as a bipartisan, comprehensive public affairs firm specializing in government relations, traditional and digital communications, grassroots advocacy, third-party coordination, insights, polling, coalition management and business development.
