Removing Barriers Blog

TCPA Ruling in Second Circuit is Good News for Credit Unions

Last week a decision handed down in the Second Circuit Court of Appeals held that the Telephone Consumer Protection Act (TCPA) does not allow consumers to revoke consent to receive automated or prerecorded cell phone calls if consent was previously given as part of a binding contract. In the case Reyes v. Lincoln Automotive Financial Services, Case No. 16-2104 (2nd Cir. June 22, 2017) the plaintiff-appellant argued that an automobile dealer violated the TCPA when they were contacted after sending a letter in the mail revoking consent to be called.

The district court granted summary judgment finding (1) the evidence of consent revocation was insufficient, and (2) in any event, the TCPA does not permit revocation when consent is provided as consideration in a binding contract.  The Second Circuit then affirmed this ruling.

The question of what is a “reasonable” method to revoke consent has been a concern to credit unions after the July 2015 TCPA Order provided onerous guidance in this area. This is an issue CUNA raised in our Amici Brief, and something we have sought clarity on from the FCC. Last, weeks’ ruling created helpful precedent in this area.

Several petitioners in the ongoing litigation challenging the FCC’s 2015 TCPA Order urged the D.C. Circuit this week to consider this decision by the Second Circuit prior to issuing its ruling in the case. In a letter to the court they wrote that, “Indeed, if the TCPA unambiguously provides that consent can be irrevocable in the context of a bargained-for exchange, then it is at minimum unreasonable to interpret the statute as prohibiting agreements to define mere methods of revocation,” further adding, “In holding that the TCPA clearly incorporates common-law rules of consent, Reyes confirms that the TCPA gives parties the right to agree to forms of effective revocation.”

CUNA is closely following the outcome of the litigation challenging the 2015 TCPA Order in the D.C. Circuit. We believe the Second Circuit’s decision is a step in the right direction providing clarity on the issue of revoking consent and we will continue to seek clarity on this, and other concerning aspects of the 2015 TCPA Order from the FCC.