Banned in Minnesota Today: Trigger Leads

by Alex Stenback on August 1, 2007

One of the better pieces of legislation to come out the East side sausage factory this year is a law banning the sale of what are known as "trigger leads" (more on this here, and here.)

[The] new law prohibits consumer reporting agencies or any
other business entity from selling or exchanging with a third party
information that a person’s credit history was requested in connection
with a mortgage loan application.

In other words, until today, any time you applied for a mortgage, or had a mortgage lender
run your credit report, that information, along with whatever other
data was available in your file (credit score, current address, telephone number, loan balances, etc.)  was immediately sold [Edit for Clarification: Sold by the credit repositories - Experian, Equifax, Trans-Union, not your lender, who has no control over this], over and over again, to all manner of sketchball lenders from coast to coast, which would then use that data to solicit you for a loan, often using shady tactics ("your lender asked us to call you because our rates are better" for instance.)

Though we have always recommended shopping for a mortgage lender to work with, this should be done on your terms, rather than having your data indiscriminately sold to whoever will write the check.  Trigger leads are a breach of consumer privacy, and absolutely one of the more onerous practices the credit industry engages in.  Good law.
Mortgage Privacy Law Summary [leg.state.mn] 

{ 2 comments… read them below or add one }

David Porter August 1, 2007 at 11:27 am

Congratulations Minnesota!

lisa dunn August 10, 2007 at 3:56 pm

Hi Alex…hope you’re having a great summer! I just wanted to stop by to say hi, and to ask…do you know when this law is going into effect?

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