3 Ways the New FCC Rule Change Will Impact Lenders’ Lead Funnels
The FCC rule change, effective January 2025, shifts what constitutes prior express written consent under the Telephone Consumer Protection Act (TCPA). This closes the so-called “lead generator loophole” that has allowed consumer leads to be sold to multiple parties without express consumer consent. Following the rule changes, consumers will proactively check names on a list to share their data with specific companies. In other words, the rule will require “one-to-one” consent.
How will lenders be impacted? Depending on current lead strategies, lenders may need to dramatically rethink their acquisition techniques.
1. Lead buying will change—and price per lead could substantially increase.
If you’re purchasing your leads, you’ll find that the process will fundamentally change along with the financials of lead-buying. Because each lead will be sold to a much smaller pool of bidders, the price of those leads will rise, impacting the amount of leads lenders are able to pursue.
“With the FCC rule change, leads will become more expensive because they will become more exclusively yours,” explains Alan Parris, VP/Managing Director of Maxwell Private Label Origination and co-host of the Clear to Close podcast. “This brings a lot of difference in lenders’ experience and economics with regard to their leads. It changes the lead landscape and whose business model can support his type of structure.”
2. At the same time, lead quality could increase.
Despite the cost per lead rising, there are still positives to the new structure mandated by the FCC rule. Namely, since each lead will be pursued by a much smaller pool of lenders, the lead will become more targeted, and thus more high value, to lenders.
“You won’t have to compete with others trying to dial at the same time,” says Alan. “Lenders will need to adjust to not getting as many leads, but they’ll be better quality leads. You need to determine what you’re willing to pay for that.”
3. Brand trust and recognition will become key, and lenders may need to get creative.
Just as in the NAR rule change scenario, the FCC ruling will put brand front and center for lenders looking to gain borrower business. Instead of home buyers connecting with dozens—or sometimes even hundreds—of lending options, they’ll only be contacted by those options to which they explicitly consent.
“Unless you’re the best rate out there, how do you convince the client to pick your local lending services compared to huge brand names out there like Rocket?” comments Alan. “That puts a lot of in the big brands. To ensure business, you’ll need to diversify your channels and figure out how you drive volume because your leads won’t be the same. You’ll need to find resources to go get them.”
Want to learn more about how the FCC and NAR rule changes will affect the way you capture leads?
In our new ebook, New Rules, New Strategy: How to Drive Mortgage Leads in the Aftermath of NAR & FCC Rule Changes, you’ll learn:
- How NAR and FCC rule changes will impact the home buying and mortgage lending process in coming months
- New challenges and opportunities lenders can expect to see due to the rule changes
- 3 tips for building a strong mortgage lead funnel in today’s market
- Why lenders should expect to see the role of the loan officer change—and ways to empower LOs to step up and capture more business
- Areas to invest in your lending business for the best return in 2024 and beyond
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