Al Drago/Bloomberg
NEW YORK — One of the banking sector’s top allies in Congress said he is “cautiously optimistic” about a bill that would rein in so-called trigger leads related to mortgage borrowers.
During an appearance at the American Bankers Association’s annual convention, Rep. Ritchie Torres, D-N.Y., a member of the House Financial Services Committee, told attendees that the Homebuyers Privacy Protection Act stands a good chance of passing into law this year, “if we push hard enough.”
“The ranking member [Rep. Maxine Waters] is receptive to the legislation,” Torres said. “We still have to have conversations with the chair [Rep. Patrick McHenry], but I’m cautiously optimistic we can land the plane in an otherwise dysfunctional Congress.”
The bill, also known as House Resolution 7297, was introduced at the committee level by Rep. John Rose, R-Tenn., in February. Torres is the lead Democratic co-sponsor of the bill. Sens. Jack Reed, D-R.I., and Bill Hagerty, R-Tenn., introduced similar legislation in the Senate Banking Committee last December.
The legislation would limit the ability of credit-rating agencies to sell mortgage borrower information to financial services providers.
Currently, when consumers apply for mortgages, they consent to credit checks through the three major ratings bureaus — Equifax, Experian and TransUnion. Those firms can then use that information to generate leads that are sold to companies that provide other lending, credit or insurance products.
“The theory of trigger leads is that it will lead to more choice and competition, but the practical reality of trigger leads is that it’s led to more aggressive telemarketing and predatory lending and fraud and abuse,” Torres said during an on-stage event. “Within 24 hours of applying for a mortgage, a prospective home buyer might find himself bombarded with an endless stream of phone calls from telemarketers masquerading as underwriters, and so I feel strongly, as a matter of consumer protection, the credit bureau should be prohibited from selling your data a trigger lead without your knowledge and consent.”
The bill would allow the credit bureaus to continue generating lead triggers for financial institutions with which consumers already have a relationship. The ABA supports the legislation.
In a separate conference panel on Tuesday, the ABA’s top lobbyist, Kirsten Sutton, said the trigger leads bill could be included in the National Defense Authorization Act later this year.
“There is a chance that we can see the trigger leads legislation appended to the NDAA, but the jury is still out on that — that legislation would need to go to conference,” Sutton said. “But, it has been included in the Senate version of the NDAA, so we’re keeping our eyes focused on that.”
The omnibus military spending bill has become a popular destination for legislative ideas that have bipartisan support but lack the momentum to pass as standalone laws. In 2022, then Sen. Pat Toomey, R-Pa., inserted a provision into the NDAA requiring the Federal Reserve to create a public list of institutions that have applied for, received or been denied so-called master accounts.
Sutton noted that the spending package could also be used to advance elements of the SAFER Banking Act, which would make it easier for legal marijuana businesses to engage with the banking system. But, she cautioned, that the bill could include more controversial policies, such as those related to stablecoin regulation, executive compensation or the Credit Card Competition Act, which would require large credit card issuers to enable their cards to be used on at least two networks, including one that is not run by Visa or MasterCard.
“If there is any kind of banking package moving, if we ask for help, it’s because we need it,” Sutton told the group’s members. “We may be in a little bit of a live threat, if there’s something that’s moving so … that’s something we’ll be watching closely in the lame duck [session of Congress].”
Sutton also flagged the Farm Bill and relief funding to support communities affected by Hurricanes Helene and Milton as potentially significant year-end legislative developments that could be impactful for banks.
