One mortgage lender that completed the FACTA process and began mailing the notices months in advance of the Aug. 1 deadline is seeing surprising results.
“We started investigating the new FACTA rules in the April/May timeframe, and implementation began in June,” said Mike Elam, vice president of franchise development at Capital Home Mortgage, the retail division of SouthStar Funding, Atlanta. The company has worked with Intellidyn since November 2004. Capital Home is a lender offering first-time mortgages, refinances and second mortgages to what is known as the Alt-A or less than prime market.
Capital Home, an Intellidyn client, reworked its offers to include notices that meet the new requirements for approval by TransUnion and Experian. The company got approval in June and began mailing the new offers immediately.
“We have been doing about 16,000-20,000 mail pieces per week,” Elam said. “Since we’ve done the notices we’re finding that our response rates are going up almost half a percent.”
The company’s usual response rate is 1.5 percent and is now at almost 2 percent. But Elam said the lift likely would not last.
Only 18 people have opted out since Capital Home began mailing the notices, he said.
Still, many expect the notices to hurt mail volume and response rates. Peter Harvey, president/CEO of Intellidyn, thinks the number of prescreened credit solicitation offers will decrease noticeably at first, especially if mailers have not had their new mail pieces approved by the credit bureaus.
“If a typical lender or insurance company may have six, eight, 10, 12 different versions of copy, that means every one of them has to be changed and approved,” he said.
Harvey thinks tens of millions of consumers might opt out of prescreened offers because of the notices, especially since the toll-free number makes it simple.
“It will not be at the level of 94 million people saying ‘do not call me’ but it might be 20 percent of that,” he said.
Even so, he said, mailers will have to pick up the slack by mailing more non-preapproved credit offers.
“It’s not going to slow down their solicitation volume in the long run,” he said. “They don’t have a choice; they have to market.”
Kristen Bremner covers list news, insert media, privacy and fundraising for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters