HB1184
To Amend The Fair Mortgage Lending Act; And To Protect A Consumer's Privacy In Certain Mortgage Applications.
AI-Generated Summary
This bill proposes amendments to the Fair Mortgage Lending Act in Arkansas. It aims to enhance consumer privacy in mortgage applications. A new definition for 'mortgage trigger lead' is introduced, specifying it as a lead generated from a consumer report triggered by a credit application inquiry. However, it excludes reports obtained by lenders who already hold or service the applicant's debt. The bill also introduces a new prohibited practice related to the use of these mortgage trigger leads. Specifically, it prohibits using them in a misleading or deceptive manner. This includes requirements for initial communication to disclose the loan officer's identity, how contact information was obtained, and the basis of the solicitation. It also prohibits contacting consumers who have opted out of prescreened offers or are on the national 'Do-Not-Call' registry. The bill clarifies that knowingly using information from a mortgage trigger lead in violation of these provisions is prohibited.
Potential Impact Analysis
Who Might Benefit?
["Consumers who apply for credit or mortgages would be direct beneficiaries. The bill aims to protect their privacy by regulating the use of 'mortgage trigger leads,' which are generated when a consumer's credit is inquired about during an application process. By requiring clear disclosures and prohibiting certain types of unsolicited contact, consumers would have greater control over their personal financial information and receive fewer unwanted solicitations. This would include individuals who have opted out of prescreened offers or are listed on national Do-Not-Call registries, who would gain additional protection against certain marketing practices.", 'Existing mortgage holders or servicers who already have a relationship with a consumer are also indirectly beneficiaries. The bill explicitly excludes consumer reports obtained by these entities from the definition of mortgage trigger leads that are subject to the new regulations, allowing them to continue their business practices without the new disclosure requirements.']
Who Might Suffer?
["Businesses that generate and utilize 'mortgage trigger leads' for marketing purposes would be most directly and negatively impacted. This includes mortgage brokers, mortgage bankers, and loan officers who rely on these leads to solicit new business. The bill imposes new disclosure requirements and restrictions on their communication methods, such as needing to identify themselves, explain how they obtained contact information, and refrain from contacting consumers who have opted out or are on 'Do-Not-Call' lists. These new regulations could increase operational costs and potentially reduce the effectiveness or volume of their lead generation and sales activities."]