House advances bill requiring callers to disclose source of mortgage 'trigger lead' data

Representative Lee Johnson presented a bill aimed at companies that buy and call mortgage applicants after credit checks — a practice known as “trigger leads.” Greg Raymer of the Mortgage Bankers Association of Arkansas described how consumer-reporting companies can identify loan type and sell contact information as leads to third parties who then call applicants during the application process.

Nut graf: Sponsors said the bill requires callers who purchase trigger leads to state their name and company, explain how they obtained the consumer’s contact information (a trigger lead), disclose that the call is a solicitation, and state they are not affiliated with the creditor the applicant used. The committee passed the bill by voice vote.

Raymer described the calls as intentionally deceptive and said applicants can receive dozens of calls or texts within minutes of a credit pull. “Companies like Equifax can tell the type of loan that you're applying for, and they will sell your contact information as a lead,” Raymer said. He said the calls can prompt applicants to share sensitive information with callers not affiliated with the lender.

Representative Wooten and others asked whether the state can control credit-reporting agencies; Raymer said federal action would be required to prohibit the practice entirely but that state rules can add consumer protections such as requiring disclosure or prior relationship or consent. The bill also identifies enforcement through the securities commission with penalties discussed in the hearing — fines up to $10,000 and license suspension or revocation were mentioned as available enforcement tools.

No public testimony against the bill was recorded. Representative Johnson closed and the committee approved the bill by voice vote.