MReport July 2022

TheMReport — News and strategies for the evolving mortgage marketplace.

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36 | M R EP O RT FEATURE M ortgage markets are cooling following two years of record low interest rates and unprecedented demand spurred on by pandemic-driven buying. According to Fannie Mae, inflation, rising interest rates, and slow global economic growth will continue contributing to a "meaningful slowdown" in home sales for the second and third quarters of 2022. In response, mortgage market- ers are beginning to lean more heavily on lead providers to maintain steady volume for retail and consumer direct chan- nels. However, with increasing concerns about data privacy from consumers and legislators alike, adding new lead sources and scal- ing existing partnerships creates inherent marketing compliance risk for mortgage lenders. To paraphrase, fortune favors the prepared; lenders must have sound data management strategies in place to ensure consumer pri- vacy and regulatory compliance within their outbound marketing and lead generation campaigns. In doing so, marketers can avoid both legal issues and damage to brand reputation. Expanding Legislation to Address Consumer Concerns I t's no secret consumers are growing increasingly concerned about who has access to their personal data and how it is being used. A KPMG study on corporate data responsibility and consumer trust found: • 86% of the U.S. general popula- tion says data privacy is a growing concern • 68% are concerned about the level of data collected by busi- nesses • 40% don't trust companies to ethically use their data In the U.S., there is no com- prehensive federal legislation ad- dressing online consumer privacy concerns. However, a growing number of states have enacted laws to safeguard consumer pri- vacy. If consumer sentiment is not reason enough for companies to revisit their data privacy practices, new state-level regulations should provide extra motivation. Connecticut most recently passed new legislation regulating the ability for businesses to target consumers, and places limits the processing, storing, possession, and sale of consumer personal data. Connecticut joins California, Florida, Vermont, Virginia, Colorado, Utah, and South Carolina as states with consumer privacy laws on the books. While the laws share many similarities, they each include nuances that require attention. These state laws incorporate provisions first enacted in the European Union's General Data Protection Regulation (GDPR). While GDPR serves as a frame- work to build from, the existing Federal laws, rules, and acts (e.g., TCPA, TSR, National DNC to name just three), coupled with the conveyor belt of state privacy laws, now means that managing to GDPR compliance as a proxy is no longer good enough. When it comes to acquiring consumer data, like click traffic, call trans- fers, and leads, brands must com- plete additional due diligence to confirm their partners are also adhering to privacy laws. What's more, case law continues to show us that contracted indemnifica- tion and limited liability, along with insurance, though traditional business staples, do not protect lenders, and in some cases named executives, from the reach and penalties of these laws. For example, marketers who communicate with customers and prospects via calls and texts must follow strict compliance require- ments established by Telephone Consumer Protection Act (TCPA). The TCPA requires companies obtain prior express written consent from consumers before calling or texting mobile phones when using automated dialers. Firing Up Marketing Efforts as the Market Cools Down Mortgage marketers are beginning to lean more heavily on lead providers to maintain volumes. But there are privacy and regulatory issues to navigate. By Rob Rokoff

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