Rep Ritchie Torres (D-N.Y.) has introduced a bill in the House of Representatives which seeks to ban the practice of sending “trigger leads” after consumers initiate a credit inquiry regarding a home mortgage loan.
Trigger leads are consumer reports created and sold by the credit bureaus and include data on individuals who have recently applied for a mortgage or other financial service involving a credit inquiry. These reports are created and sold without the knowledge or consent of the individual about whom the report was created.
The law, if passed, would modify Section 604(c) of the Fair Credit Reporting Act by adding a new subsection. The new subsection would read:
“(4) PROHIBITION ON TRIGGER LEADS FOR RESIDENTIAL MORTGAGE LOANS.—Notwithstanding paragraph (1), no consumer reporting agency may furnish a consumer report in connection with a credit transaction that is not initiated by a consumer, if the report is being procured based in whole or in part on the presence of an inquiry made in connection with a residential mortgage loan (as defined under Section 103 of the Truth in Lending Act)”
The Consumer Data Industry Association (CDIA), a trade group representing the consumer reporting industry, has defended the practice of using trigger leads. In past lawsuits, the CDIA has maintained the practice is perfectly legal and safe and is within the right of the credit bureaus to distribute and sell.
A spokesperson for Rep. Torres said, “As a member of the Financial Services Subcommittee on Consumer Protection and Financial Institutions, he is intent on passing legislation that protects consumers’ right to their own private information.”
The bill has been referred to the House Financial Services Committee for hearings, markup and review before it may proceed to full House debate and vote.