HB 240: Mortgage lenders and brokers; prohibit unfair or deceptive practices in consumer transactions related to mortgage trigger leads

House Bill 240 (AS PASSED HOUSE AND SENATE)

By: Representatives Williams of the 148th, Ridley of the 6th, Rhodes of the 124th, Douglas of the 78th, Hilton of the 48th, and others

A BILL TO BE ENTITLED

AN ACT

To amend Part 2 of Article 15 of Chapter 1 of Title 10 and Article 13 of Chapter 1 of Title 7 of the Official Code of Georgia Annotated, relating to the Fair Business Practices Act and licensing of mortgage lenders and mortgage brokers, respectively, so as to prohibit unfair or deceptive practices in consumer transactions related to mortgage trigger leads; to provide for definitions; to provide for a remedy; to provide for related matters; to provide for an effective date; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.

Part 2 of Article 15 of Chapter 1 of Title 10 of the Official Code of Georgia Annotated, relating to the Fair Business Practices Act, is amended by adding a new Code section to read as follows:

"10-1-393.20.

(a) As used in this Code section, the term:

(1) 'Mortgage broker' shall have the same meaning as set forth in Code Section 7-1-1000.

(2) 'Mortgage lender' shall have the same meaning as set forth in Code Section 7-1-1000.

(3) 'Mortgage trigger lead' means a consumer report obtained pursuant to Section 604(c)(1)(B) of the federal Fair Credit Reporting Act, 15 U.S.C. Section 1681b, where the issuance of the report is triggered by an inquiry made with a consumer reporting agency in response to an application for credit. Such term shall not include a consumer report on an applicant obtained by a mortgage lender or mortgage broker with which the applicant has initially applied for credit or which holds or services an existing extension of credit of the applicant who is the subject of the report.

(b) When using a mortgage trigger lead to solicit a consumer who has applied for a loan with another mortgage lender or mortgage broker, it shall be an unfair or deceptive act or practice to:

(1) Fail to state in the initial solicitation that the person is not affiliated with the mortgage lender or mortgage broker with which the consumer initially applied;

(2) Fail in the initial solicitation to conform to state and federal law relating to prescreened solicitations using consumer reports, including the requirement to make a firm offer of credit to the consumer;

(3) Use information regarding consumers who have opted out of the prescreened offers of credit or who have placed their contact information on the federal do-not-call registry; or

(4) Solicit a consumer with an offer of certain rates, terms, and costs with the knowledge that the rates, terms, or costs will be subsequently changed to the detriment of the consumer.

(c) Failure to comply with the provisions of this Code section shall be considered an unfair or deceptive act or practice which is unlawful and shall therefore be punishable by the provisions of this part."

SECTION 2.

Article 13 of Chapter 1 of Title 7 of the Official Code of Georgia Annotated, relating to licensing of mortgage lenders and mortgage brokers, is amended in Code Section 7-1-1013, relating to prohibition of certain acts, by revising paragraphs (10) and (11) and by adding a new paragraph to read as follows:

"(10) Provide an extension of credit or collect a mortgage debt by extortionate means; or

(11) Purposely withhold, delete, destroy, or alter information requested by an examiner of the department or make false statements or material misrepresentations to the department or the Nationwide Multistate Licensing System and Registry or in connection with any investigation conducted by the department or another governmental agency; or

(12) Engage in unfair or deceptive acts or practices in violation of Code Section 10-1-393.20."

SECTION 3.

This Act shall become effective upon its approval by the Governor or upon its becoming law without such approval.

SECTION 4.

All laws and parts of laws in conflict with this Act are repealed.