Removing Barriers Blog

Letter Highlights Problems with FCC Implementation of TCPA Amendments in Budget Act

The Bipartisan Budget Act, which was passed by Congress and signed by President Obama in the fall of 2015, amended the Telephone Consumer Protection Act (TCPA) so that calls using an autodialer, “made solely pursuant to the collection of a debt owed to or guaranteed by the United States,” are exempt from the requirement to obtain prior express consent from the debtor. The Act required implementation of this law within a 9-month timeframe. Accordingly, the FCC proposed steps for implementation on May 4, providing industry 30 days to comment on its ideas.  

Regrettably, the FCC’s interpretation of this law mirrors its July 2015 TCPA Omnibus Declaratory Ruling and Order (“Order”), which shows a fundamental lack of understanding of the need to communicate with consumers in a timely and efficient manner. Today, we submitted a letter to the FCC expressing three specific concerns. 

First, the FCC takes an extremely narrow reading of how to implement the Budget Act. The agency does not appropriately address the concerns Congress and the President had with the onerous limitations placed by the FCC on those seeking to communicate with consumers about debt owed to, or guaranteed by, the federal government. Their proposed rule proposes to restrict the number of covered calls to three per month, and only includes debt when the borrower is in default or delinquent on a payment. The three calls would also include unanswered calls. Furthermore, calls to reassigned numbers are not included in the exemption, except for a one-call safe harbor. Our letter notes that these limitations make this exemption virtually meaningless. 

Second, we urge the FCC to include both mortgage debt and Small Business Administration (SBA) loans in its consideration of debt owed to or guaranteed by the federal government. We note that credit union mortgages backed by government-sponsored entities should qualify for the TCPA’s exemption because the United States is at risk for the credit loss, despite not holding legal title to these mortgages.  

We also highlight that enhanced and timely communications to borrowers about mortgage debt can prevent foreclosures and other negative consequences for consumers, such as late fees. In addition, we argue that loans offered by credit unions through programs such as the SBA’s 7(a) Loan Program, with up to 90% of the loan guaranteed by the SBA, should be included in the exemption. 

Lastly, we reiterate our concerns with the FCC’s problematic July 2015 TCPA Order, which provides an exemption for financial institutions that in practicality is not workable and provides little relief regarding their ability to communicate pertinent account information with consumers. 

The letter concludes that the FCC’s proposal once again takes an unreasonable approach to applying the language of the TCPA to consumers’ use of modern technology, and disregards consumers’ preferences for communicating via cell phones. As a result, consumers in financial distress may not be able to receive important information about their accounts, which is necessary to improve their situation. 

We will continue to engage the FCC about our concerns with its TCPA interpretations as applied to credit unions. Last month, Congress highlighted similar concerns in a hearing in the Senate Commerce Committee.