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HPPA makes several pivotal legal changes governing when, how, and to whom credit reports may be shared in the mortgage and insurance context.
HPPA makes several pivotal legal changes governing when, how, and to whom credit reports may be shared in the mortgage and insurance context.
On Sept. 5, 2025, President Donald J. Trump signed into law the Homebuyers Privacy Protection Act (“HPPA” or “Act”) (see http://bit.ly/4n12e0e), which takes effect on March 5, 2026. This bipartisan legislation represents a major development in consumer privacy law and directly affects real estate professionals, attorneys, mortgage lenders, and buyers. The act officially implements significant curbs on the controversial practice of “trigger leads.” Advocates, lenders, and consumer groups hailed the move as a landmark victory for privacy, transparency, and greater control for prospective homeowners. The HPPA makes several significant changes to the Fair Credit Reporting Act (“FCRA”) (see http://bit.ly/41PK8Gi).
The act restricts the use of “trigger leads,” which are credit report alerts generated when a consumer applies for a mortgage or insurance coverage. When consumers apply for a loan or apply for insurance, the lender or insurance company customarily requests their credit report from a credit reporting agency (CRA). These CRAs then generate lists of all individual credit inquiries made in the context of a residential mortgage application or insurance application.
CRAs then sell this list to third parties, usually other lenders, mortgage brokers, insurance companies, and insurance brokers, who use the data to reach out directly to the consumer. These CRAs generate these trigger leads almost immediately, without the knowledge or consent of the consumers. For years, the sale of trigger leads to third-party lenders and brokers has resulted in a flood of unsolicited calls, emails, texts, and mail solicitations directed at buyers. While marketed as “competitive offers,” these practices often created confusion, frustration and opportunities for fraud.
For home buyers, the consequences are all too familiar: within hours or days of applying for a loan, they may be inundated with unsolicited calls, emails, text messages, and even unsolicited mail offers from multiple lenders, many of whom they have never contacted or expressed interest in working with. These contacts are intrusive, overwhelming, and confusing, especially amid what should be a mindful, deliberative process of evaluating loan and/or insurance options by consumers.
Consumer-advocacy groups argue that trigger leads can facilitate predatory or deceptive marketing, particularly targeting more vulnerable populations, including older adults, minority groups, first-time home buyers and other groups. AARP, for instance, highlighted how older homebuyers may receive postcards or calls that appear to come from their real estate agent or lender, but are in fact marketing campaigns that push unnecessary products or services.
Introduced in the House by Representatives John Rose (R-TN) and Ritchie Torres (D-NY), the bill received bipartisan sponsorship and enjoyed strong support in both chambers. It passed the House Financial Services Committee unanimously (46-0) on June 10, 2025, then the House by voice-vote on June 23, and ultimately cleared the Senate by unanimous consent on August 2. This legislation is particularly notable during these politically divisive times. It is important, now more than ever, for our nation’s political leaders to come together and continue to find common ground and pass consequential legislation that protects Americans.
HPPA makes several pivotal legal changes governing when, how, and to whom credit reports may be shared in the mortgage and insurance context. First, it implements restrictions on the ability of CRAs to share credit reports. CRAs are prohibited from providing a consumer’s credit report to third parties in connection with a residential mortgage transaction or application for an insurance product. A CRA may share a report only when either:
Further, before a CRA may share “trigger leads,” there is a requirement that there must be a “firm offer” based on a concrete pre-qualified offer, not simply speculative marketing. The effective date of the act is March 5, 2026.
The act will provide consumers with greater privacy and control over their personal information. Consumers will no longer be bombarded by unsolicited offers triggered automatically by a new mortgage application. Only entities with consent or a prior relationship may contact them.
The HPPA will hopefully make the homebuying process, which is already incredibly stressful, much smoother by eliminating unwanted solicitations and reducing confusion about the legitimacy of those companies that are reaching out.
The law should also establish stronger protection from fraud and scams. With fewer unknown actors contacting homebuyers, there is a reduced risk of deceptive offers, scams, or misleading marketing masquerading as official communications.
While HPPA curbs certain lead-generation practices and the use of “trigger leads,” it does not eliminate legitimate competition. Lenders, insurance companies, and related brokers must now rely on traditional methods, such as direct referrals or marketing to existing customers, rather than automatically utilizing trigger leads to mass-contact new prospects without their consent.
The act also forces a shift toward increased trust and transparency. Lenders and insurance companies that emphasize honest communication, clear disclosures, and relationship-based marketing will certainly gain an edge as consumers become more discerning. It is also important for these companies to be aware of and to implement operational and compliance adjustments by March 5, 2026. Credit bureaus, lenders, insurance companies, and data vendors must adjust workflows, contracts, and legal compliance measures to ensure they do not accidentally violate the new statute.
The National Association of Realtors (NAR) celebrated the law as “a win for transparency, consumer control, and privacy in the mortgage process.” Executive leadership emphasized its importance in halting a practice that “bombards homebuyers” at a pivotal moment. The American Association of Retired Persons (AARP) framed the law as a shield against deceptive practices, misleading offers, and predatory marketing, targeting older and potentially more vulnerable homebuyers.
The Financial Services Committee and lawmakers, particularly Committee Chair French Hill (R-AR), noted that the law “protects homebuyers’ personal financial information, while encouraging competition and choice in the mortgage market.” Co-sponsors and supporters across party lines echoed its balanced, consumer-friendly nature.
It is important to note that until the law goes into effect on March 5, 2026, existing “trigger-lead” practices remain in force and consumers need to be aware of this practice. While consumers and industry stakeholders have six months to prepare, consumers can act now to protect their private information from being sold without their consent or knowledge. Consumers may opt out of pre-screened credit offers by registering at www.OptOutPrescreen.com or by calling 1-888-5-OPT-OUT. Another way for consumers to protect themselves is to register their telephone and cellular phone numbers on the National Do-Not-Call Registry at www.DoNotCall.gov to reduce unsolicited calls.
While the HPPA does not create new enforcement authorities, enforcement continues through FCRA’s existing channels, namely the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC). Actions under FCRA, including actions relating to the new HPPA, must be brought by the consumer within: (i) two years after the date they discover the violation; or (ii) five years after the date of the violation itself, whichever is earlier.
Credit bureaus will need to build or update “consent-capture” mechanisms. Lenders, mortgage brokers, insurance companies, and insurance brokers, must review and possibly revamp marketing strategies to comply with new consent and relationship thresholds. There will certainly be ongoing oversight. Regulators, industry groups, and consumer advocates will continue monitoring compliance. The law’s impact on competition, innovation, and consumer experience will likely continue evolving past its implementation.
Under 15 U.S.C. § 1681(n) of the FCRA, any person or entity that willfully fails to comply with a FCRA requirement (such as the new restrictions on “trigger leads”) is civilly liable to the consumer. Damages may include: (i) actual damages that the consumer suffered as a result of the violation; or (ii) statutory damages of $100 to $1,000 per consumer, even if no actual harm is provable. In addition, courts may award punitive damages (intended to punish particularly egregious conduct) and reasonable attorneys’ fees and litigation costs to the prevailing consumer.
Other FCRA provisions allow the CFPB or FTC to impose civil money penalties on entities for failing to comply with their statutory requirements. These penalties, in early 2024, were approximately $4,800 per violation and are adjusted for inflation annually.
If an individual or entity obtains a consumer report under false pretenses or knowingly without a permissible purpose, that individual or entity faces liability for actual damages or $1,000, whichever is greater. Under 15 U.S.C. § 1681(o) of the FCRA, if a violation is not willful but merely negligent, consumers can still recover actual damages, plus attorney’s fees and costs.
The Homebuyers Privacy Protection Act represents a meaningful step forward in consumer privacy within the mortgage and insurance ecosystem. By curbing trigger-lead abuse brings a measure of control back to homebuyers at a critical time in their lives. The law balances the need for a competitive mortgage and insurance market with the imperative to protect sensitive financial data from unwanted exploitation. As the law takes effect in March 2026, both consumers and industry participants will be affected. For homebuyers, the promise is a cleaner, less intrusive process. For lenders, compliance will be crucial, and at the same time, the new law underscores the value of trust, transparency, and obtaining consent when dealing with clients.
About the author: Legal Column author John Dolgetta, Esq., is the principal of the law firm of Dolgetta Law, PLLC. For information about Dolgetta Law, PLLC and John Dolgetta, Esq., please visit http://www.dolgettalaw.com. The foregoing article is for informational purposes only and does not confer an attorney-client relationship and shall not be considered legal advice. The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views or positions of HGAR, its affiliates, or any other entity.
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