(NewsNation) — Buying a home is already stressful, and for many borrowers, a barrage of unsolicited calls from competing lenders only makes it worse.
Now, federal lawmakers are considering legislation to ease that headache by cracking down on the abuse of so-called “trigger leads.”
The Senate passed the bipartisan Homebuyers Privacy Protection Act last week, and a similar measure is making its way through the House.
If enacted, the legislation would limit credit reporting agencies’ ability to sell consumer data to potential creditors without consent.
Right now, those agencies can resell certain consumer information to other lenders without explicit permission, a practice that often leads to unwanted calls and emails.
“Consumers should not get needlessly ‘spammed’ with unsolicited, predatory offers just because they take a necessary step in the homebuying process,” Senator Jack Reed, D-R.I., who led the effort with Senator Bill Haggerty, R-Tenn., said in a statement.
What are trigger leads, and why do they exist?
A trigger lead happens when a lender checks a borrower’s credit report through a hard inquiry, like when applying for a mortgage. Credit bureaus can then sell that information to other lenders and companies, often without the consumer’s knowledge.
In theory, this dynamic creates more competition by allowing lenders to compete for borrowers, potentially leading to better loan offers for consumers. But the marketing tactic can also be a major headache.
“Entities that have no relationship with the consumer are buying trigger leads as soon as a customer applies for a mortgage – and then bombarding the applicant with hundreds of confusing calls that seek to lure them away from their chosen lenders,” the American Bankers Association wrote in a letter to Congress supporting the recent legislation.
A 2024 survey by LendingTree found that 74% of Americans have received unwanted calls, text messages, and emails after their credit was pulled for a loan or insurance policy. More than half (54%) of respondents reported that the unsolicited communication caused confusion as they attempted to make a financial decision.
In some cases, the flood of messages starts almost immediately, often within minutes of applying for a loan.
“This bill will ensure that consumers maintain greater control over their personal financial information, preventing predatory practices and strengthening data privacy,” Rep. Ritchie Torres, D-N.Y., who co-led the House bill with Rep. John Rose, R-Tenn., said in a statement.
Is there any opposition to the legislation?
The Consumer Data Industry Association, a trade group representing credit bureaus, has warned the legislation would cut off smaller players from reaching potential customers while boosting the nation’s largest lenders, according to The Wall Street Journal.
“Mortgage lenders should not inundate consumers with unwanted telephone solicitations. However, maintaining a competitive market allows consumers to shop for a better deal that can save them money,” CDIA President Dan Smith told the Journal.
While excessive trigger lead outreach can be a nuisance, a separate LendingTree survey suggests many homebuyers aren’t shopping around for better deals and end up leaving money on the table.
The survey found that over half (54%) of recent homebuyers with a mortgage only received one mortgage offer. However, among those who shopped around, 45% received a lower offer than their initial one.
Over the life of a 30-year fixed-rate mortgage, borrowers can save an average of $80,024 by shopping around for a loan, according to LendingTree.
The House version of the bill recently passed the Financial Services Committee unanimously and could soon advance to a full House vote. After that, the two versions would need to be reconciled before a final bill hits President Trump’s desk.
Consumers can reduce unwanted phone calls by registering with the National Do Not Call Registry at donotcall.gov. Signing up at optoutprescreen.com offers added protection.
