Senate File 587 - Introduced SENATE FILE 587 BY COMMITTEE ON COMMERCE (SUCCESSOR TO SSB 1145) (COMPANION TO HF 857 BY COMMITTEE ON COMMERCE) A BILL FOR An Act relating to solicitation by a financial institution 1 using prescreened trigger lead information from a consumer 2 report. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1681SV (2) 91 nls/ko

S.F. 587 Section 1. NEW SECTION . 525.1 Financial institutions —— 1 unfair practices. 2 1. As used in this section, unless the context otherwise 3 requires: 4 a. “Consumer report” means the same as defined in the 5 federal Fair Credit Reporting Act, 15 U.S.C. §1681a. 6 b. “Financial institution” means the same as defined in 7 section 527.2, and includes a mortgage broker licensed under 8 chapter 535B, a lender of mortgage loans or consumer loans, and 9 any other person that engages in the business of lending money 10 in the state. 11 c. (1) “Mortgage trigger lead” means a consumer report 12 obtained pursuant to the federal Fair Credit Reporting Act, 13 15 U.S.C. §1681b, where the issuance of the consumer report 14 is triggered by an inquiry made with a consumer reporting 15 agency in response to an application for credit secured by real 16 property. 17 (2) “Mortgage trigger lead” does not include a consumer 18 report on an applicant obtained by a financial institution 19 with which the applicant has initially applied for credit, or 20 a financial institution that holds or services an existing 21 extension of credit of the applicant who is the subject of the 22 consumer report. 23 2. A financial institution shall not use an unfair or 24 deceptive practice when using prescreened mortgage trigger 25 lead information derived from a consumer report to solicit a 26 consumer who has applied for a loan with a different financial 27 institution. A financial institution shall be deemed to have 28 engaged in an unfair or deceptive practice if the financial 29 institution does any of the following: 30 a. In an initial phase of a solicitation from a lender 31 or loan broker, the financial institution fails to clearly 32 and conspicuously state that the financial institution is 33 not affiliated with the financial institution with which the 34 consumer initially applied. 35 -1- LSB 1681SV (2) 91 nls/ko 1/ 3

S.F. 587 b. In an initial solicitation, the financial institution 1 fails to conform to state and federal law relating to 2 prescreened solicitations using consumer reports, including but 3 not limited to the requirement to make a firm offer of credit 4 to the consumer. 5 c. The financial institution uses information regarding a 6 consumer who has opted out of prescreened offers of credit or 7 who has placed the consumer’s contact information on a federal 8 do-not-call registry. 9 d. The financial institution solicits a consumer with an 10 offer of certain rates, terms, or costs, but subsequently 11 changes the rates, terms, or costs to the detriment of the 12 consumer. 13 3. A violation of this section shall constitute an unlawful 14 practice under section 714.16. 15 Sec. 2. Section 714.16, subsection 2, Code 2025, is amended 16 by adding the following new paragraph: 17 NEW PARAGRAPH . r. It shall be an unlawful practice for a 18 financial institution to violate section 525.1. 19 EXPLANATION 20 The inclusion of this explanation does not constitute agreement with 21 the explanation’s substance by the members of the general assembly. 22 This bill relates to solicitation by a financial institution 23 using prescreened trigger lead information from a consumer 24 report. 25 Under the bill, a financial institution shall not use an 26 unfair or deceptive practice when using prescreened mortgage 27 trigger lead information derived from a consumer report 28 to solicit a consumer who has applied for a loan with a 29 different financial institution. “Consumer report”, “financial 30 institution”, and “mortgage trigger lead” are defined in the 31 bill. 32 A financial institution is engaged in an unfair or deceptive 33 practice when in an initial phase of a solicitation from a 34 lender or loan broker, the financial institution fails to 35 -2- LSB 1681SV (2) 91 nls/ko 2/ 3

S.F. 587 clearly and conspicuously state that the financial institution 1 is not affiliated with the financial institution with 2 which the consumer initially applied; fails to conform to 3 state and federal law relating to prescreened solicitations 4 using consumer reports, including but not limited to the 5 requirement to make a firm offer of credit to the consumer; 6 uses information regarding a consumer who has opted out of 7 prescreened offers of credit or who has placed the consumer’s 8 contact information on a federal do-not-call registry; or 9 solicits a consumer with an offer of certain rates, terms, or 10 costs, but subsequently changes the rates, terms, or costs to 11 the detriment of the consumer. 12 A financial institution that violates the bill is engaged in 13 an unlawful practice under Code section 714.16. 14 -3- LSB 1681SV (2) 91 nls/ko 3/ 3