Homebuyers Privacy Protection Act
The Homebuyers Privacy Protection Act would tighten how consumer reporting agencies (CRAs) can furnish consumer reports in the context of residential mortgage loan prescreening. Specifically, it adds new limitations to the prescreening provision in the Fair Credit Reporting Act (FCRA). Under the bill, a CRA may only provide a consumer report to another party in connection with a residential mortgage loan if there is a firm offer of credit or insurance, and the recipient has documented authorization or a qualifying relationship to the consumer (such as having originated or serviced the consumer’s mortgage, or being an insured depository institution or credit union with a current account for the consumer). The bill also creates a comprehensive 180-day countdown for its effective date and requires a GAO study on the value of mortgage "trigger leads" delivered via text messages, with a report due within 12 months. Purpose: To protect homebuyers’ privacy by limiting prescreened mortgage offers and the flow of consumer reports to third parties, while gathering data on the value and use of trigger leads.
Key Points
- 1Adds a new prescreening rule to FCRA Section 604(c): a consumer report may be furnished to another party in connection with a residential mortgage loan only if there is a firm offer of credit/insurance and the recipient meets specific authorization or relationship criteria.
- 2Authorized recipients or qualifying relationships: recipient must either have consumer authorization or be (a) the mortgage originator, (b) the servicer of the consumer’s current mortgage, or (c) an insured depository institution or credit union with a current account for the consumer.
- 3Definitions included: clarifies terms for the new rule such as credit union, insured depository institution, residential mortgage loan, and servicer to ensure consistent application.
- 4Effective date: the new prohibitions and requirements take effect 180 days after enactment.
- 5GAO study requirement: the Comptroller General must study the value of trigger leads received by text message, including input from state regulators, mortgage lenders, depository institutions, CRAs, and consumers; a report is due within 12 months of enactment.