Compliance Blog

T-C-P-A. This four letter acronym invokes a lot of fear in credit unions across the country. Most of that fear is based on the very real risk of facing a lawsuit for alleged violations of the Telephone Consumer Protection Act (TCPA). There are individuals known as "TCPA trolls" who have made a lot of money filing TCPA lawsuits against those institutions that have intentionally or unintentionally placed calls (including text messages) to their numbers. Plaintiffs' attorneys were quick to notice this trend and have profited greatly from the skyrocketing number of TCPA cases in recent years.

Source: U.S. Chamber of Commerce Institute for Legal Reform

For starters, Congress enacted the TCPA in 1991. That's right, 26 years ago. Considering all of the technological advancements since the '90s, it is no surprise that the Act is in serious need of modernization. The Federal Communications Commission (FCC) has issued several orders since then attempting to clarify the TCPA's vague language, including in 2003, 2012, and (this one is a doozy) 2015. Shortly after the FCC's 2015 Declaratory Ruling and Order (2015 Order), NAFCU detailed the background and details of the FCC's proclamation on this blog. Since then, NAFCU has been very vocal about its concerns with the following aspects of the 2015 Order and the FCC's TCPA regulations generally: (1) the restrictive free-to-end-user exemption; (2) the overly-expansive definition of "automatic telephone dialing system" (autodialers); (3) antiquated distinctions between mobile and residential phones; (4) the very vague standard for revoking previous consent; and (5) a lack of flexibility with regard to reassigned numbers.

The bottom line is that credit unions are not abusing telephone technology to cause a nuisance to and invade the privacy of their members. Nonetheless, credit unions are swept in with intrusive telemarketers and scam robocallers and subject to some pretty hefty restrictions on consumer communications. In 2015, ACA International sued the FCC in the United States Court of Appeals for the District of Columbia Circuit to resolve questions with the 2015 Order and the case was consolidated with similar lawsuits. Shortly thereafter, NAFCU filed a motion to intervene on behalf of the petitioners and the motion was granted. Oral arguments were heard on October 19, 2016 and the three-judge panel appeared to be sympathetic to the petitioners' arguments and questioned the FCC's interpretation of the TCPA. The D.C. Circuit has yet to issue a decision in the case, but it could happen any day now.

Meanwhile, there have been some changes at the FCC. Earlier this year, former Commissioner Ajit Pai was elevated to Chairman and then Brendan Carr and Jessica Rosenworcel were nominated and confirmed as commissioners, filling the remaining two seats and providing the FCC with a majority Republican leadership. Commissioner Michael O'Rielly and Chairman Pai have been outspoken about their disapproval of the 2015 Order. Chairman Pai actually dissented to the order and said "Rather than focus on the illegal telemarketing calls that consumers really care about, the Order twists the law's words even further to target useful communications between legitimate businesses and their customers." Chairman Pai said the 2015 Order would make abuse of the TCPA much easier and primarily benefit trial lawyers, not the American public. NAFCU concurs and is optimistic that under his leadership, Chairman Pai will make serious efforts to clarify the TCPA and undo some of the FCC's harmful regulations, including the 2015 Order.

Unfortunately, until we see a decision in the ACA International case, the FCC is unlikely to make any significant changes to its TCPA regulations.  Despite pleas for relief to the FCC, NAFCU does not anticipate the FCC to modify any of its TCPA rules or exceptions until the D.C. Circuit has spoken. While we wait patiently though, the FCC has taken steps to target unlawful scam robocalls and malicious spoofing and started looking into creating a centralized database for reassigned numbers, which will help ease some of the difficulties related to the TCPA. But these steps still do not solve the primary concerns with the 2015 Order, mainly the definition of autodialer and the exceptions for free-to-end-user calls.

Credit unions deserve better. Credit unions should receive tailored regulations that recognize their unique relationship with members and, in terms of the TCPA, that they typically only contact consumers with useful information regarding their existing accounts. NAFCU has been asking the FCC to make changes to its regulations and to reevaluate the 2015 Order for years now, but again, the FCC appears to have put the issue on hold. For now, NAFCU is working on developing a landing page to keep you updated on the latest TCPA developments and doing everything possible to make sure every commissioner at the FCC knows that credit unions are struggling with TCPA compliance. There is also currently a credit union-specific petition pending before the FCC, which requests an "established business relationship" exception for credit union informational calls to wireless numbers. It is open for comment until November 6, 2017. NAFCU is commenting in support of the petition and encourages you to do the same. You can submit comments here. Other than that, until the D.C. Circuit's decision is released, credit unions and other financial institutions are on the hook. Ring riiiiiing!