Committee advances House Bill 240 to ban trigger leads and protect consumers

A significant step towards consumer protection in Georgia's banking sector was taken during the recent meeting of the Georgia State Legislature's Banks & Banking Committee. The committee unanimously passed House Bill 240, aimed at regulating "trigger leads"—a practice that has raised concerns among consumers regarding privacy and predatory lending.

Trigger leads occur when a lender pulls a consumer's credit report for a mortgage application, prompting credit reporting agencies to sell that consumer's information to other lenders. This can lead to an influx of unsolicited calls, texts, and emails, often from companies misrepresenting themselves as affiliated with the original lender. Such practices not only invade privacy but can also mislead consumers into unfavorable loan terms and higher interest rates.

The bill, which mirrors the language of a previous version that passed last year but stalled in the legislative process, has garnered strong support from the Mortgage Bankers of Georgia. They advocate for a ban on trigger leads while allowing original lenders to solicit their existing customers. The committee's discussions highlighted the absence of complaints regarding the bill, indicating a consensus on its necessity.

As the bill moves forward, it promises to enhance consumer protections in the mortgage lending process, addressing the growing concerns over privacy invasions and deceptive practices in the industry. The committee's swift action reflects a commitment to safeguarding Georgia residents from potential financial pitfalls associated with unsolicited lending offers.