The mortgage industry is starting to work through major changes after a federal law restricting abusive trigger leads took effect this week, limiting when credit bureaus can sell a borrower’s information to competing lenders.
The policy stems from the Homebuyers Privacy Protection Act (S.B. 3502), which amends the Fair Credit Reporting Act to curb the practice of selling consumer data generated when a borrower applies for a mortgage. The Act was signed into law by President Donald Trump on Sept. 5, 2025.
After years of being lobbied for, the act cleared the House in June and the Senate by unanimous consent in August. The legislation had bipartisan backing from Reps. John Rose (R-Tenn.) and Ritchie Torres (D-N.Y.), as well as Sens. Bill Hagerty (R-Tenn.) and Jack Reed (D-R.I.).
The law went into effect March 5 and was backed by mortgage industry groups and consumer advocates, including the Mortgage Bankers Association (MBA) and the Broker Action Coalition (BAC), who argued the practice created confusion and privacy concerns for borrowers.
A trigger lead occurs when a lender pulls a borrower’s credit report during a mortgage application. Credit bureaus then sell that information to other lenders, who may contact the borrower with competing loan offers. The practice often results in a surge of unsolicited calls, texts and emails shortly after an application is submitted.
Industry groups such as the National Association of Mortgage Brokers (NAMB) say the new law will sharply limit that activity and establish a national standard.
“Several states — including Rhode Island, Connecticut, Kansas, Kentucky, Maine, Texas, Utah, Wisconsin, Idaho, and Arkansas — had already enacted their own trigger lead restrictions,” NAMB wrote in a recent bulletin that outlined the parameters of the ban.
Opportunities for consumers to be contacted will be rare, the association clarified.
“If the creditor already has an established financial relationship with the consumer — such as the consumer’s current bank or mortgage servicer — outreach may still be permissible. A consumer who affirmatively opts in to receiving prescreened offers also removes that restriction for themselves. Outside of those narrow exceptions, the sale and use of trigger leads is prohibited.”
Consumer reporting agencies generally cannot sell trigger leads unless the borrower has given explicit consent or the institution already has a qualifying relationship with the consumer, such as an existing mortgage or bank account.
Brendan McKay, broker and owner of McKay Mortgage Co. and the co-founder and CEO of BAC, said it’s important to remember the law doesn’t ban companies from using trigger leads — rather, it limits the credit bureaus from selling them.
“A common question we get is whether solicitors will simply find a workaround, and enforcement will fall short. … While the bureaus have done plenty of unethical things, blatantly breaking federal law is a bridge they’re unlikely to cross. Regulators also aren’t the only ones who enforce laws. Class-action lawsuits are all the rage these days,” McKay said.
The legislation also requires that any trigger lead tied to a mortgage credit inquiry be connected to a legitimate “firm offer of credit,” rather than general marketing outreach.
NAMB also said the change will help protect borrowers from misleading solicitations and reinforce trust between loan officers and their clients.
Mortgage industry leaders have long argued that trigger leads undermine relationships between borrowers and their chosen lenders by enabling competitors to contact applicants immediately after a credit check. This can lead to borrowers sometimes receiving dozens of communications within hours of applying for a loan.
Supporters of the reform say the new rules will give homebuyers greater control over their personal financial information and reduce the barrage of marketing calls during the mortgage process. Lenders, meanwhile, will need to adjust marketing and lead generation strategies to comply with the updated restrictions, NAMB said.
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