Trigger leads stripped out of defense bill, won’t pass this year

A bill aimed at limiting the use of credit trigger leads was excluded from the Senate’s Fiscal Year 2025 National Defense Authorization Act (NDAA), the Broker Action Coalition informed its members on Wednesday. However, the group assured members that a backup strategy is already in place.

“This bill, along with a slew of other provisions, were stripped out of the current version of the NDAA package,” which means that the “Trigger Lead Bill is unlikely to pass this year,” executives at the trade group wrote in a letter directed to partners and advocates.

In September, Senate Armed Services Committee Chairman Jack Reed (D-RI) and Ranking Member Roger Wicker (R-MS) included the bill, also known as the Homebuyers Privacy Protection Act of 2024, in the military spending bill, expected to be voted on in mid-December. 

However, doubt arose after the election due to changes in Congress and concerns that the bill was too limited, particularly from Patrick McHenry (R-NC), chair of the House Financial Services Committee. Additionally, credit bureaus advocated for a softer version of the legislation.

“While it is not fully dead yet, and work is still being done, it’s got a steep uphill climb if it’s going to happen before the end of the year,” BAC executives  Katie Sweeney and Brendan McKay wrote. “Theoretically it can get back in, and we’re going to work like hell to try and do just that, but we’re aware of the realities of the situation.”

The executives highlighted in the message that the bill “amassed 90 co-sponsors in the House and 43 in the Senate, bringing over 130 Legislators together.” BAC had more than 250 meetings on Capitol Hill with lawmakers on the topic.

Trigger leads occur when a potential borrower’s credit score is pulled for a mortgage application and credit bureaus sell this data to companies seeking to contact the borrower. While legal, this practice often results in borrowers receiving a flood of unsolicited calls, texts and emails.

Currently, the industry operates on an “opt-out” basis, but Senate Amendment 2358 proposed shifting to an “opt-in” model, with certain exceptions. These include situations where the consumer explicitly authorizes the sharing of their information, the lender originated the borrower’s current loan, the lender is an insured depository institution or credit union with an active account for the borrower, or the company services the loan.

However, credit bureaus advocated for a more lenient approach, allowing companies to solicit borrowers by phone if they are the current mortgage originator or loan servicer. They also pushed for an amendment permitting companies to send “written offers” via mail, email or text to borrowers obtained through mortgage leads. The BAC also fired back against credit bureaus in its message by pointing out its fight against the bill and the practice of “price-gouging.” Mortgage executives told HousingWire the price of credit reports is expected to increase by at least 20% next year.

“Credit Report costs have doubled since 2022 and we’re facing another steep increase next year. Over that same period of time, FICO’s stock price has increased 480%,” the executives wrote.