A myriad of trade advocates emphasized their support for legislation seeking to impose a widely supported prohibition on “trigger leads,” sold by credit agencies when consumers apply for residential mortgage loans, in letters to House committee leaders. The bill passed out of committee with bipartisan approval.
The Homebuyers Privacy Protection Act (H.R. 2808), introduced by Reps. John Rose (R-Tenn.) and Ritchie Torres (D-N.Y.), would amend the Fair Credit Reporting Act to ban the practice of lenders using information purchased from credit agencies about loan applicants to then market their services, often unsolicited.
Many real estate finance organizations and consumer advocates have been in alignment in opposing the use of trigger leads over the past half decade through a multitude of unsuccessful legislative attempts to outlaw the practice.
“Today, consumers are inundated with unwanted and invasive solicitations after they apply for a mortgage, yet the current process for a consumer to opt out is confusing and does not take effect immediately,” Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey wrote in a letter to lawmakers. “As a result, consumers may believe that their accounts have been hacked. A mortgage application should not be public information. H.R. 2808 would give consumers more control over their private financial information and shield them from unwanted solicitations.”
ICBA also is one of 16 trade groups and consumer advocacy organizations undersigned on a joint letter urging House leaders to vote “Aye” to advance H.R. 2808. Among the other notable supporters are the Mortgage Bankers Association, the National Association of Realtors, the American Bankers Association, America’s Credit Unions, National Association of Home Builders, the Housing Policy Council, the Center for Responsible Lending and the Consumer Federation of America.
“This important consumer protection legislation is designed to curb the abusive use of mortgage credit ‘triggers leads’ in all but a limited set of circumstances,” the organizations wrote. “We appreciate that this carefully crafted proposal has been included in the list of bills to be considered during this week’s full Financial Services Committee markup – and would urge all committee members to vote ’aye’ on the Rose ANS (amendment) to H.R. 2808.”
ICBA’s letter also highlighted community bankers’ support for two bills intended to benefit smaller financial institutions.
The Small Bank Holding Company Relief Act (H.R. 2835), introduced by Rep. Byron Donalds (R-Fla.), aims to increase the asset threshold for institutions seeking to qualify as a small bank holding company from $3 billion to $25 billion.
“A small bank holding company is permitted to issue debt on more flexible terms,” Romero Rainey wrote. “The debt may be used to make equity investments in subsidiary banks, thereby raising capital levels and enabling more lending in support of local economies.”
The third bill covered in the letter is the Advancing the Mentor-Protégé Program for Small Financial Institutions Act (H.R. 3709), introduced by Rep. Joyce Beatty (D-Ohio). This legislation would create a Treasury Financial Agent program designed to support partnerships between minority depository institutions (MDIs), rural community banks and other financial institutions.
“This legislation reinforces and supports the critical role MDIs and rural community banks serve as a lifeline in their communities, providing tailored financial products, and fostering greater economic growth,” Romero Rainey wrote.