Congress enacted the Telephone Consumer Protection Act (TCPA) in 1991 to protect consumers’ privacy rights by eliminating fraudulent telemarketing practices and even legitimate calls that use objectionable practices. The TCPA's antiquated and problematic language has severely impeded credit unions’ ability to communicate with their members regarding essential financial information on their existing accounts.
The Federal Communications Commission (FCC) has failed to provide regulatory guidance or clearly define the TCPA through its regulations, leaving credit unions vulnerable to frivolous ligation. The FCC's July 2015 Declaratory Ruling and Order provides very limited exemptions to the TCPA for financial institutions making free autodialed calls to consumers. This Order has caused many credit unions to cease important communications with members over fear of inadvertently violating the rule. NAFCU has urged the FCC to avoid a one-size-fits-all approach to rulemaking that does not exempt good actors making calls consumers actually want to receive. Informational calls from credit unions to their members about potentially fraudulent activity and how to protect their personal financial information are undoubtedly in the best interest of the consumer.
As community-based, member-owned financial institutions, credit unions play no part in illegal communications and are not the type of entity the TCPA was intended to target. Over the years, the FCC has created a regulatory labyrinth that has enriched plaintiffs’ attorneys and hurt credit unions attempting to make legitimate and useful informational calls. Credit unions deserve relief so that they may contact their members about important information regarding their accounts without a high risk of facing frivolous lawsuits.
NAFCU supports the FCC’s recent rules aimed at targeting illegal and fraudulent robocalls. The FCC should continue to find ways to tailor its regulations to single out the bad actors who are harassing consumers with unwanted and potentially harmful robocalls instead of sweeping in good actors like credit unions in broadly-written regulations. NAFCU is also pleased to see that the FCC is considering creating a centralized database for reassigned numbers. This would be an important step in resolving one of the many issues with the FCC's 2015 Order; however, a lot remains to be done.
Congress passed the TCPA (codified at 47 U.S.C. § 227) in 1991, which amended the Communications Act of 1934, to protect consumers from telemarketers using automated telephone dialing systems “("autodialers"),” or artificial or prerecorded voice messages. Section 227(b)(1)(A) prohibits the use of an autodialer to call any wireless number absent an emergency purpose or the “prior express consent of the called party.” Non-emergency telemarketing calls to a residential line using a prerecorded voice are also prohibited without the consumer’s consent unless the call is “exempted by rule or order of the Commission" under paragraph (2)(B). Section 227(b)(2)(B) of the TCPA authorizes the FCC to create exemptions for calls “that are not made for a commercial purpose” or “do not include the transmission of any unsolicited advertisement” to residential lines. Section 227(b)(2)(C) provides the FCC with exemption authority on autodialed or prerecorded calls to wireless numbers so long as the calls are free to the consumer and may be subject to conditions prescribed by the FCC to protect consumers’ privacy rights.
Since its enactment, the FCC has issued several regulations implementing the Act. As noted above, the 2015 Order has proven to be particularly problematic. In fact, it is currently the subject of ongoing litigation in the D.C. Circuit Court of Appeals – ACA International v. FCC – which challenges the validity of the 2015 Order’s rulings related to autodialers, reassigned numbers, and revocation of consent.
Of note in the 2015 Order, the FCC implemented Section 301 of the Bipartisan Budget Act of 2015, which amended the TCPA to exempt from the prior express consent requirement certain autodialed or prerecorded calls to wireless numbers or residential lines if the calls are “made solely to collect a debt owed to or guaranteed by the United States.” The FCC interpreted this phrase to mean that calls may be made to collect a debt after the loan has become delinquent and to collect debts that are at imminent risk of delinquency, but only within 30 days before the default date.