Utah lawmakers consider bill to regulate trigger leads in mortgage industry

In a pivotal meeting on February 14, 2025, the Utah Senate Economic Development and Workforce Services Committee convened to discuss significant legislation aimed at protecting consumers in the mortgage industry. The spotlight was on House Bill 99, which addresses the controversial practice of "trigger leads"—a process where lenders purchase consumer credit inquiries to solicit potential borrowers, often leading to confusion and potential fraud.

As the meeting unfolded, representatives from the Utah Mortgage Professionals Association, including Lauren Patterson, emphasized the need for legislative action to curb the misuse of consumer data. Patterson explained that trigger leads not only undermine trust between consumers and lenders but also expose individuals to predatory lending practices and identity theft. She highlighted that several states, including Kentucky, have already enacted laws to regulate this practice, and Utah is poised to follow suit.

The proposed legislation does not aim to eliminate trigger leads entirely but seeks to establish guidelines that mortgage professionals must adhere to when handling such data. This approach aims to protect consumers while still allowing for competition in the marketplace. Patterson reassured committee members that the bill would not restrict consumers' ability to seek competitive offers but would instead introduce necessary safeguards against deceptive practices.

Senator Johnson raised concerns about potential barriers to competition, questioning how the legislation would balance consumer protection with the need for market freedom. In response, Patterson clarified that the bill would enforce compliance among mortgage professionals, ensuring that consumer information is handled responsibly. The legislation aims to create a framework that allows for competition while protecting consumers from unscrupulous practices.

The committee members expressed their support for the bill, recognizing the importance of safeguarding consumers, particularly vulnerable populations such as seniors and first-time homebuyers. With a unanimous vote, House Bill 99 was passed out of committee, signaling a significant step toward enhancing consumer protections in Utah's mortgage industry.

As the meeting transitioned to discuss additional housing construction amendments, the momentum for consumer protection in the mortgage sector remained a focal point, reflecting a growing commitment to addressing the complexities of the housing market in Utah. The passage of this bill marks a crucial development in the ongoing efforts to ensure a fair and transparent lending environment for all Utah residents.