BLOG

Question:  Are there new regulations restricting the use of trigger leads?

Answer:  Yes.

Trigger leads involve lenders obtaining a consumer’s credit information (frequently without the consumer’s knowledge or consent) from a credit reporting agency after the consumer applies for a loan, such as a home loan secured by a mortgage, and then soliciting the consumer with loan offers. These unsolicited offers usually come in the form of telephone calls, texts, and/or emails from lenders with whom the consumer did not apply and can be intrusive and overwhelming for consumers.

While previously legal under the Fair Credit Reporting Act (FCRA) if followed by a “firm offer of credit”, the recent enactment of the federal The Homebuyers Privacy Protection Act will curb this practice. The Homebuyer Protection Act amends the FCRA to prohibit consumer reporting agencies from furnishing a trigger lead except in limited circumstances, such as when the third party (i) originated a current residential mortgage on behalf of the consumer, (ii) is the current mortgage loan servicer to the consumer, or (iii) maintains a current specified banking relationship with the consumer (this exception only applies to a depository institution or credit union who holds an account in the consumer’s name).  The Act is effective on March 5, 2026.

In addition to the federal legislation, ten states (AR, CT, ID, KS, KY, ME, RI, TX, UT, WI) now have statutes imposing restrictions on how mortgage lenders/brokers may utilize trigger leads in connection with their mortgage activities.  

Mortgage lenders and brokers must ensure they act in compliance with applicable laws limiting use of trigger leads.