Homebuyers Privacy Protection Act
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The Homebuyers Privacy Protection Act amends the Fair Credit Reporting Act to bar credit bureaus from selling a consumer's credit report to lenders for unsolicited "trigger lead" mortgage offers unless the consumer consented or the requester already has a current lending or account relationship with them.
The law addresses a practice in which shopping for a mortgage triggered a flood of unsolicited calls, texts, and offers from competing lenders who bought the applicant's credit data, and orders a federal study on trigger leads sent by text message.
What this law does
What it does
The law amends Section 604(c) of the Fair Credit Reporting Act to restrict when a credit reporting agency may furnish a consumer's credit report to a third party after that consumer applies for a residential mortgage loan. A credit bureau may only release the report if the offer is a firm offer of credit or insurance, and the requesting party either certifies it has the consumer's authorization or already has a qualifying relationship with the consumer, such as being the loan originator, current mortgage servicer, or an insured depository institution or credit union holding a current account for that consumer. The law also directs the Government Accountability Office to study the value of "trigger leads" received by text message, gathering input from state regulators, mortgage lenders, depository institutions, credit reporting agencies, and consumers, and to report findings to Congress within 12 months of enactment. The credit-report restrictions themselves take effect 180 days after enactment.
Key provisions
- 1Prohibits credit reporting agencies from furnishing a consumer's credit report to a third party based on a mortgage credit request unless the offer is a firm offer of credit or insurance.
- 2Allows report sharing only if the requester certifies consumer authorization or already originated, services, or holds a current account for the consumer's mortgage or banking relationship.
- 3Sets the credit-report restrictions to take effect 180 days after enactment.
- 4Directs the Government Accountability Office to study the value of trigger leads received by text message, with input from regulators, lenders, and consumers.
- 5Requires the Comptroller General to report study findings to Congress within 12 months of enactment.
Who is affected
Consumers applying for residential mortgage loans, credit reporting agencies (credit bureaus), mortgage originators and servicers, insured depository institutions, and credit unions. Mortgage lenders that previously purchased "trigger lead" lists to solicit recent mortgage applicants will lose access to that data except in the newly permitted circumstances.
Why it matters
Homebuyers who apply for a mortgage will no longer be bombarded with unsolicited calls, texts, and offers from competing lenders who bought their credit information as a "trigger lead." Lenders without an existing relationship to the consumer lose a marketing channel, while consumers gain more control over who can access their credit report during the mortgage process.
What changed
Changes to existing law
Amends Fair Credit Reporting Act (15 U.S.C. 1681b(c)) (Sec. 2)
Adds a new paragraph limiting when consumer reporting agencies may furnish credit reports for mortgage-related prescreening requests to third parties.
Agencies directed to act
Effective dates
- The credit-report furnishing restrictions and related amendments
- GAO report on trigger leads received by text message due to Congress
How it works
Credit reporting agencies must build compliance processes to verify, before releasing a mortgage-related consumer report, that the requester either holds documented consumer authorization or qualifies through an existing origination, servicing, or depository relationship. The restriction takes effect 180 days after enactment, giving agencies and lenders time to adjust systems. Separately, the GAO must gather input from regulators, lenders, depository institutions, credit bureaus, and consumers, then deliver a report to Congress within a year on the value of text-message trigger leads.
Legislative status & sources
Latest action
Became Public Law No: 119-36.
Official CRS summary
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This act limits the circumstances in which credit reporting agencies may provide consumer credit reports to third parties in connection with residential mortgage transactions.
Specifically, the act prohibits a credit reporting agency from providing a consumer's credit report to a third party in connection with a residential mortgage transaction unless the transaction consists of a firm offer of credit or insurance and (1) the third party provides documentation certifying that it has the consumer's consent; or (2) the third party has originated a mortgage on behalf of the consumer, is a current mortgage loan servicer to the consumer, or has a current specified banking relationship with the consumer.
These provisions take effect 180 days after enactment.
The Government Accountability Office must study and report on the value of trigger leads (a marketing tactic facilitated by credit reporting agencies that may result in unsolicited credit offers to a consumer after a consumer applies for a separate type of credit) received by text message.
Legislative subjects
Consumer credit; Finance and Financial Sector; Financial services and investments; Housing finance and home ownership; Real estate business; Right of privacy
Committee report
H. Rept. 119-166