Mortgage lenders and brokers; prohibit unfair or deceptive practices in consumer transactions related to mortgage trigger leads
Summary
HB 240 amends Georgia’s Fair Business Practices Act and the state’s mortgage lender and mortgage broker licensing laws to regulate the use of “mortgage trigger leads.” A mortgage trigger lead is a consumer report generated when a person applies for credit and that application triggers prescreened marketing offers from other lenders or brokers. The bill makes it an unfair or deceptive practice for a mortgage lender or broker using such a lead to solicit a consumer without clearly stating that it is not affiliated with the consumer’s original lender, without complying with state and federal prescreened-solicitation rules, or by using information from consumers who have opted out or are on the federal do-not-call registry. It also prohibits bait-and-switch style solicitations that advertise rates, terms, or costs that the solicitor knows will later change to the consumer’s detriment.
The bill further amends the mortgage licensing statute to make violations of the new trigger-lead rules an express prohibited act for licensed mortgage lenders and brokers. In effect, it ties these marketing restrictions to the state’s existing enforcement framework for unfair or deceptive acts and practices, allowing violations to be punished under the Fair Business Practices Act. The measure takes effect upon gubernatorial approval or becoming law without approval and repeals conflicting laws.
The overall sentiment around HB 240 appears strongly favorable. It passed the House unanimously, 165-0, and the Senate by a wide margin, 51-1, indicating broad bipartisan support for limiting aggressive or misleading mortgage solicitation practices. The lack of committee transcript material suggests there was little recorded public controversy in the available materials.
The main point of contention, to the extent one is visible from the vote history, is likely the balance between consumer protection and mortgage industry marketing practices. Supporters appear to have viewed the bill as a straightforward anti-deception and privacy measure aimed at protecting borrowers from confusing or predatory trigger-lead solicitations. Any opposition likely centered on the compliance burden for lenders and brokers or on restrictions to a common lead-generation practice, but the near-unanimous votes suggest those concerns did not gain much traction.
Impact
HB 240 adds a new Code section to Georgia’s Fair Business Practices Act and amends the mortgage lender/broker licensing provisions to create a specific state-law prohibition on deceptive mortgage trigger-lead solicitations. It expands the list of unlawful acts for licensed mortgage lenders and brokers and makes noncompliance enforceable as an unfair or deceptive practice under existing consumer-protection remedies. The bill affects mortgage lenders, mortgage brokers, consumer reporting-based marketing practices, and consumers who have recently applied for mortgage credit.
Sentiment
The bill’s sentiment is overwhelmingly positive and consumer-protection oriented. It received unanimous support in the House and nearly unanimous support in the Senate, suggesting broad agreement that mortgage trigger-lead solicitations should be more transparent and less intrusive. The available record does not show significant committee debate or organized opposition.
Contention
The likely area of contention is the regulation of mortgage lead-generation practices. Critics could argue that the bill restricts legitimate marketing and adds compliance obligations for lenders and brokers, while supporters frame it as a necessary response to misleading solicitations, privacy concerns, and bait-and-switch tactics. Because the bill passed with very strong margins and there are no committee transcripts in the record, any disagreement appears to have been limited and not politically significant.
Prohibits mortgagee from refusing to accept partial mortgage payments from a mortgagor which does not bring the mortgagor current on such mortgagor's mortgage debt.
Prohibits mortgagee from refusing to accept partial mortgage payments from a mortgagor which does not bring the mortgagor current on his or her mortgage debt.
Prohibits mortgagee from refusing to accept partial mortgage payments from a mortgagor which does not bring the mortgagor current on his or her mortgage debt.
Financial institutions: mortgage brokers and lenders; prohibition on certain mortgage lending practices; modify. Amends title & secs. 1 & 2 of 1977 PA 135 (MCL 445.1601 & 445.1602).