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CUNA Regulatory Comment Call

May 31, 2005

EXECUTIVE SUMMARY

• The Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM Act) requires that an e-mail message that has a commercial primary purpose must:
  • Clearly and conspicuously indicate that the message is an advertisement or solicitation.
  • Provide recipients with an opportunity to "opt-out" from receiving additional commercial e-mail messages from the same entity.
  • Provide a physical postal address of the sender.
• "Transactional or relationship" e-mails, which may include most, if not all of the e-mails sent by a credit union, are not considered "commercial e-mail messages" and, therefore, not subject to the requirements of the CAN-SPAM Act requirements.
• The Federal Trade Commission (FTC) is responsible for enforcement of the CAN-SPAM Act for state-chartered credit unions, and the National Credit Union Administration is responsible for enforcement for federally-chartered credit unions.
• The FTC has issued a proposed rule interpreting a number of provisions in the CAN-SPAM Act, several of which may have an impact on credit unions.
• Comments on the proposed rule are due by June 27, 2005. Please submit your comments to CUNA by June 20, 2005. If you provide comments directly to the FTC, please refer to "CAN-SPAM Act Rulemaking, Project No. R411008" on the response and on any envelope you send to the FTC at the addresses indicated in the proposed rule.

Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Senior Vice President and Associate General Counsel Mary Dunn at mdunn@cuna.coop and to Senior Assistant General Counsel Jeff Bloch at jbloch@cuna.coop; or mail them to Mary and Jeff in c/o CUNA’s Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, DC 20004-2601. You may also contact us at 800-356-9655, ext. 6732, if you would like a copy of the proposed rule, or you may access it on the Internet at the following address:

http://www.ftc.gov/os/2005/05/05canspamregformfrn.pdf

BACKGROUND

Under the CAN-SPAM Act, every commercial e-mail message is required to:

• Clearly and conspicuously indicate that the message is an advertisement or solicitation.
Provide recipients with an opportunity to "opt-out" from receiving additional commercial e-mail messages from the same entity.
• Provide a physical postal address of the sender.

The FTC has the authority to implement rules under the CAN-SPAM Act. Earlier this year, the FTC issued a rule as to when an e-mail should be considered a "commercial e-mail message" and, therefore, covered under the CAN-SPAM Act requirements, as opposed to a "transactional or relationship" e-mail that would not be covered under the CAN-SPAM Act requirements. Click below for more information:

http://www.cuna.org/reg_advocacy/member/analysis/ftc_011005.html

The current proposed rule addresses a wide variety of issues, many of which are not directly relevant for credit unions. Below is more information about those issues that may be relevant for credit unions.

BRIEF DESCRIPTION OF THE PROPOSED RULE

The FTC proposes to make the following changes to the CAN-SPAM Act requirements:

• Add a definition to the term "person," which is used throughout the CAN-SPAM Act, to clarify that it is not limited to a natural person, but includes an individual, group, unincorporated association, limited partnership, corporation, or other business entity.
• Limit the definition of the "sender" of the e-mail to address situations in which a single e-mail message may contain advertisements from multiple persons. Under the proposal, the sender and, therefore, the one required to comply with the CAN-SPAM Act requirements, would be the person who initiated the message and was either:
• the only person who controlled the content of the message;
• determined the e-mail addresses to which it would be sent; or
• was identified in the "from" line as the sender.
• Add to the definition of a "valid physical postal address" that has to be included in the commercial e-mail to clarify that Post Office boxes and private mailboxes established pursuant to the United States Postal Services regulations are included within this definition.
• Shorten from ten to three days the opt-out processing time that a sender has to honor an opt-out request from a recipient of the commercial e-mail.
• Clarify that a recipient of the commercial e-mail may not be required to pay a fee, provide information other than his or her e-mail address and opt out preferences, or take any steps other than to send a reply e-mail message or visit a single website in order to exercise the opt-out right.

• Do any of the changes in the proposed rule pose significant burdens that outweigh the potential benefits for consumers? Are there alternatives that would minimize these burdens?
  
  

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• Do you agree with the change with regard to the definition of "valid physical postal address?" Some believe a Post Office box or private mailbox should not be included as they can be used by criminals that can commit fraud, while remaining anonymous. Do you agree that these should be excluded from the definition?
  
  

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• E-mail messages from membership organizations, such as from credit unions and leagues, may likely be "transactional or relationship" in nature and, therefore, exempted from the CAN-SPAM Act requirements. Should this also apply to e-mails sent to those whose membership has lapsed or should such e-mails be covered under the CAN-SPAM Act requirements if they advertise or promote the membership entity?
  
  

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• Is three business days enough time to comply with an opt-out request? If not, what time frame would be appropriate? Are you aware of software products that can process these opt-out requirements within this time frame? Are these products affordable and widely used?
  
  

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• Should the opt-out request be honored indefinitely? If not, how long should the request be honored before commercial e-mails can again be sent to those who exercise the opt-our right?
  
  

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• Should debt collection e-mails be considered "commercial" and, therefore, covered under the CAN-SPAM Act requirements? Should e-mails be exempted from the CAN-SPAM Act requirements under the "transactional or relationship" message exception if it is an individualized message sent from one employee of the sender to an individual?
  
  

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• Other comments?
  
  

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