Idaho Implements New Regulations on Mortgage Trigger Leads
Effective July 1, Idaho will introduce new regulations to control the use of consumer information concerning mortgage credit inquiries. These provisions aim to enhance consumer privacy and transparency in the mortgage lending process.
Understanding Mortgage Trigger Leads
Under the new law, a “mortgage trigger lead” is defined as a consumer report that results from an inquiry made with a credit reporting agency related to a credit application, as outlined in Section 604(c)(1)(B) of the Fair Credit Reporting Act (FCRA).
Key Amendments and Requirements
The legislation sets forth several critical requirements for companies utilizing mortgage trigger leads:
- Firms must disclose that they have no affiliation with the lender or broker who initially received the consumer’s data.
- Consumers must be informed that their information was acquired without the original lender’s knowledge or consent.
- Adherence to FCRA prescreening regulations is mandatory, which includes the provision of firm credit offers.
- Solicitations to consumers who have opted out or are listed on do-not-call registries are strictly prohibited.
Context of the Legislation
Idaho’s decision to regulate mortgage trigger leads aligns with ongoing efforts by various states to safeguard consumer data in residential mortgage transactions. Texas was one of the most recent states to enact similar laws, reflecting a trend towards increased oversight in this area.
Industry Advocacy and Legislative Efforts
The new regulations come amid advocacy from mortgage industry organizations, such as the Mortgage Bankers Association (MBA), the National Association of Mortgage Brokers (NAMB), and the Community Home Lenders of America (CHLA). These groups have been actively lobbying for stricter controls on credit reporting agencies’ use of borrower information without consent. Notably, exemptions may be provided for lenders that directly service the mortgage or those with an established relationship with the consumer.
Future Legislative Outlook
The push for broader national legislation concerning mortgage trigger leads gained momentum following a recent attempt to pass a bill that cleared the Senate but stalled in the House of Representatives in December 2024. Industry stakeholders are emphasizing the need for renewed legislative efforts, highlighting it as a priority for 2025. An MBA representative indicated ongoing advocacy efforts aimed at curtailing the misuse of mortgage trigger leads while allowing for appropriate usage in real estate transactions. “MBA’s advocacy continues to stop the abusive use of mortgage trigger leads while preserving their use in appropriately limited circumstances during a real estate transaction,” the spokesperson stated.
At the time of reporting, NAMB had not provided an update regarding its position on the recent developments.
