CHLA Asks CFPB To Move On Trigger Leads

The Community Home Lenders of America (CHLA) sent a letter to the Consumer Financial Protection Bureau (CFPB) pressing for action on trigger leads.

A trigger lead provision was dropped from the National Defense Authorization Act (NDAA). The provision, Senate Amendment 2358, would prevent the national credit agencies from selling credit reports of consumers to mortgage companies, known as trigger leads. Consumers end up bombarded with advertising from companies they didn’t consent to have communications from.

The NDAA was passed by the House without the amendment this week.

But the dream isn’t dead. The CHLA wants the CFPB to adopt the dropped provisions regardless through the Fair Credit Reporting Act (FCRA).

Trigger leads lack a “firm offer of credit” because the companies don’t have access to debt-to-income and loan-to-value information, CHLA argues, a violation of the FCRA. 

The only way they could have that information is if they already have a relationship with the borrower, which is a perfectly valid scenario under the proposed rules.

“While we understand there may be efforts to find another legislative vehicle for this provision, we believe it is time for administrative action to curb the explosion of deceptive and harassing texts, emails, and phone calls that immediately follow a mortgage application,” the letter reads.

“Therefore, CHLA asks the CFPB to issue guidance (if necessary through rulemaking) stating that the presumption is that a mortgage trigger lead solicitation does not meet the firm offer of credit requirement – and is therefore not permissible – UNLESS the mortgage lender has originated the borrower’s existing mortgage loan or the lender has an existing relationship with the borrower.”

A copy of the letter was also sent to the Federal Trade Commission (FTC).