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In August the Federal Communications Commission adopted an exemption for autodialed, prerecorded calls to collect a debt owed to or guaranteed by the United States from the TCPA's prior-express-consent requirement. It was published in the Federal Register Wednesday and goes into effect 60 days from November 16.
This change was prompted by the Budget Act of 2015, (Budget Act) which amended the TCPA to create the exemptions for calls made to cell phones when collecting a debt owed to or guaranteed by the federal government. However, the FCC's rule took a narrow reading of this law, and requires several limitations surrounding the exemption.
As CUNA outlined in our COMP Blog, here is a brief snapshot of this exemption:
Debt collection calls/texts will fall under the exemption for federal debts if the consumer is delinquent at the time the call is made, or at an imminent risk of delinquency as a result of the terms or operation of the loan program itself (e.g., end of grace or deferment period), and in the 30 days before such an event.
The exemption only applies to existing debts for which the United States is currently the owner or guarantor of the debt. Note that the FCC did not clarify which federal debts are included or excluded from coverage.
In addition, federal debt collection calls/texts (which includes any “call” that is initiated or attempted):
May only be made to the consumer or another person or entity legally responsible for paying the debt (e.g., co-signers, guarantors, guardians, trustees, etc.).
Must only be about the debt in question. Any marketing content will transform the call into a non-exempt telemarketing call.
May only be made to one of three categories of wireless telephone numbers: 1) the wireless number the debtor provided at the time the debt was incurred, such as on the loan application; 2) a wireless number subsequently provided by the debtor to the owner of the debt or the owner’s contractor; or 3) a wireless number the owner of the debt or its contractor has obtained from an independent source, provided that the number actually is the debtor’s telephone number.
Are limited to three federal debt collection calls in a 30-day period. In addition, pre-recorded or artificial voice calls cannot exceed 60 seconds and text messages cannot exceed 160 characters.
Can only be made between 8:00 a.m. and 9:00 p.m. (per called party’s time zone).
Can only be made by the federal government or its contractor.
CUNA filed a comment letter in response to the implementation of the Budget Act, which urged the FCC to include both mortgage debt and Small Business Administration loans in its consideration of debt owed to or guaranteed by the federal government. The FCC’s final rule did not include such clarifications. As a result of the significant limitations surrounding the exemption and the lack of clarity in the final rule outlining what type of debt can qualify, we do not believe it provides any significant relief to credit unions. Notably, as we outlined previously, the Supreme Court has also recently looked at this issue.
A recent article from a law firm outlines one perspective on potential additional TCPA reform in the new administration.
CUNA will continue our efforts to seek relief for credit unions in the new Congress and administration.
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