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Today we sent a letter to the Senate Commerce, Science, and Transportation Committee in advance of a hearing entitled, “The Telephone Consumer Protection Act at 25: Effects on Consumers and Business." The letter expressed our serious concerns about the Federal Communications Commission's (FCC) problematic Omnibus Declaratory Ruling and Order (“Order”) concerning the Telephone Consumer Protection Act (TCPA). This obtuse and unworkable Order has impacted the ability of credit unions to communicate with their members about pertinent account information.
Our letter thanked the committee for holding the hearing and provided a detailed explanation of the problems that this Order has created. Unfortunately, the confusion created by the TCPA Order has only increased the uphill battle of regulatory burden that credit unions are facing, and will place additional limits on their ability to provide the safest and most affordable products and services to consumers.
The Exemption for Financial Institutions Provides Minimal Relief
In its Order, the FCC recognized the importance of receiving information from financial institutions. It provided an exemption for calls concerning: (1) transactions and events that suggest a risk of fraud or identity theft; (2) possible breaches of the security of customers’ personal information; (3) steps consumers can take to prevent or remedy harm caused by data security breaches; and (4) actions needed to arrange for receipt of pending money transfers.
However, the conditions that must be met to qualify for these exempted calls are difficult, if not impossible, to meet. The Order requires that the exempted calls must be free-to-end-user calls, or in other words, there can be no charge of any kind to the consumer. This requirement places an unreasonable burden on financial institutions to ensure that notifications do not count against a recipient's plan for minutes or texts. The technology and resources to be able to do this are far from readily available to the majority of credit unions, particularly smaller ones.
Additionally, the exemption only allows calls and text messages to be sent to wireless numbers provided by the customer of the financial institution. An example of a problem with this is it could preclude another member of a family with a different number, but who is impacted by the account update, not to be allowed to receive a call about it.
The Expansion of What is Considered an Autodialer is Problematic
Another concerning aspect of the Order is the expansion of what is considered an automated telephone dialing system (autodialer). This is important for credit unions to know because if they are making informational calls using an autodialer to a consumer’s cell phone, they need either oral or written prior express consent. Notably, dissenting FCC Commissioner Ajit Pai expressed concern that the language about what is considered an autodialer used in the Order is so expansive it could even cause a device like a smartphone to now be considered an autodialer.
Currently, credit unions are not even able to determine if their calling systems are covered under the new Order. As a result of this ambiguity, some have limited their communications or have been forced to revert to manually dialing calls to members. Instead of providing clear definitions or examples of new technologies that are not autodialers, the FCC leaves enormous space for future judicial interpretation. This muddled guidance and lack of certainty is exasperating for credit unions and consumers looking for certainty in the law.
The Order Conflicts with Other Governmental Processes and Priorities
This Order also conflicts with priorities from other federal agencies, most notably the CFPB. As the CFPB has been repeatedly encouraging increased communication between financial institutions and their consumers/members, the FCC's Order has made such communication more difficult.
The FCC continues to ignore the input of industry, consumers, Congress, and even the President. It has far exceeded the scope of the authority Congress granted it, and did not provide an opportunity for notice and comment on the Order, which allowed it to circumvent some of the protections provided in the Administrative Procedures Act and Congressional Review Act. Just this month, the FCC once again ignored the will of Congress by interpreting the Budget Act in an overly narrow and unworkable fashion.
Now decades old, the TCPA has become severely outdated and obsolete in the face of new technologies and forms of communication. Accordingly, our letter urged Congress take action to eliminate the negative consequences the FCC's recent Order is having on both financial institutions and consumers, and consider what actions can be taken to assure communication between the two can continue.
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