Rhode Island Amends Consumer Privacy Regulations
By Marlana Melendez, J.D.
Consumer privacy laws and regulations seek to protect any individual from loss of privacy due to failures or limitations of corporate customer privacy measures.
The state of Rhode Island recently passed House Bill 5769 which refers to consumer privacy in mortgage loan applications. The statute defines a “Mortgage Trigger Lead” for the purposes of consumer privacy in mortgage applications.
Pursuant to the statute, a “Mortgage Trigger Lead” is where the issuance of a consumer report is triggered by an inquiry made with a consumer reporting agency in response to an application for credit. Consumer reports are those furnished in connection with credit or insurance transactions that are not initiated by the consumer. This does not include a consumer report obtained by a lender or service that holds or services existing indebtedness of the applicant who is the subject of the report.
The statute further details prohibited acts or practices with regard to solicitation of a consumer for a residential mortgage loan. The following are considered to be prohibited acts:
- Failure to clearly and conspicuously state in the initial phase of the solicitation that the solicitor is not affiliated with the lender or broker;
- Failure to clearly and conspicuously state that the solicitation is based on personal information about the consumer that was purchased directly or indirectly, from a consumer reporting agency without the knowledge or permission of the lender or broker;
- Failure in the initial solicitation to comply with the provisions of the federal Fair Credit Reporting Act relating to prescreening solicitations that use consumer reports, including the requirement to make a firm offer of credit to the consumer; or
- Knowingly or negligently using information from a mortgage trigger lead to solicit consumers who have opted out of the prescreened offers of credit or placing phone calls to numbers on the federal or state “do not call” list.
The remedy available to an aggrieved party for a violation of this statute is an award of damages. The consumer aggrieved by a prohibited act may bring an action in the superior court in the location of the lender or broker’s office. The court may award the aggregate of actual damages resulting from the violation or one thousand dollars per violation, whichever is greater. In any successful action, the court may also award attorneys’ fees and court costs.
Additionally, the statute contains several definitions that can be found in section 2. As of July 9, 2015, House Bill 5769 has become law and now effective in the State of Rhode Island.
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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