Nothing boils a borrower’s blood more than getting a bunch of mortgage pitches after filing a loan application with a chosen lender.
Thought the agony of loan shopping was done? Think again.
It turns out a lender’s credit check can trigger a bunch of pitches from competing mortgage companies hoping to hijack the borrower.
Without your permission, Experian, TransUnion and Equifax have the chutzpah to sell so-called triggered leads to any competing lender.
Relief may be on the way.
A new law, the California Consumer Privacy Act, or CCPA, takes effect on Jan. 1, creating new consumer rights relating to the sharing of personal information collected by businesses.
I wondered if the CCPA could stop the sale of triggered leads.
To find out, you have to dig through a morass of state and federal laws and exemptions. Bottom line is all credit bureaus are subject to the CCPA, according to an email from Attorney General’s Office, which has been drafting regulations for the CCPA.
The CCPA applies to all businesses that get at least half their revenue from the sales of personal data, handle personal information for at least 50,000 consumers or data providers with at least $25 million in annual revenue.
Consumers will have the right to know what information the business has on you, the right to delete the personal information, the right to opt-out and the right to non-discrimination when a consumer exercises a privacy right.
But there are exceptions.
“Certain businesses are allowed to control their data for regulatory purposes,” said Raymond Snytsheuvel, attorney at Garris Horn. A lender servicing your loan has the right to keep your mortgage file even if you wanted the information deleted.
Depending on whom you talk to, credit reporting agencies may – or may not — get an additional exemption to sell triggered leads under existing federal law.
Whether the credit bureaus have to comply with CCPA or not, consumers will still be required to opt-out if they don’t want their data sold.
The rub is if the credit bureaus have to comply with CCPA, then they will have to spend valuable resources in responding to consumer inquiries as outlined above. And, if the credit bureaus are accused of violating the CCPA, there is the potential of AG investigations, fines, class action lawsuits and reputational risk.
Is the sale of consumer data worth this financial burden?

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Jeff Lazerson - Mortgage Columnist since 2011