This post originally appeared on the Consumer Financial Services Blog and is re-published here with permission.
The Federal Communications Commission recently denied the national Mortgage Bankers Association’s petition for exemption from the “prior express consent” requirement of the Telephone Consumer Protection Act for certain mortgage servicing calls and texts.
A copy of the FCC’s Order denying the petition is available at: Link to FCC Order.
As you may recall, the TCPA and the FCC’s implementing rules prohibit autodialed calls and texts “to wireless telephone numbers and other specified recipients except when made: (1) for an emergency purpose; (2) solely to collect a ‘debt owed to or guaranteed by the United States’; (3) with the prior express consent of the called party; or (4) pursuant to a Commission-granted exemption.”
As to the Commission granted exemption, the TCPA allows the FCC “to exempt from the consent requirement robocalls to a number assigned to a cellular telephone service that are not charged to the consumer, subject to conditions the Commission may prescribe ‘as necessary in the interest of the privacy rights [the TCPA] is intended to protect.’”
The FCC noted that it “only exercised this exemption authority in very limited and narrow circumstances—e.g., for time-sensitive messages relating to certain healthcare and financial transaction notifications,” such as when there is “indication of fraudulent transactions or identity theft” but not for example “regarding account communications, payment notifications and Social Security disability eligibility.”
In June 2016, the MBA filed a petition seeking to exempt from the TCPA’s prior express consent requirement non-telemarketing residential mortgage servicing calls to wireless telephone numbers.
These “mortgage servicing” calls would include calls “to determine the reasons and nature of a delinquency and to counsel homeowners on their obligations and potential options,” as well as calls “concerning whether a borrower has abandoned or vacated a property, discussing missing documentation needed to complete a loss mitigation application, and/or determining the homeowner’s current perception of their financial circumstances and ability to repay the debt.”
The MBA explained at length how many of these communications “are required by other federal and state laws or regulations.” It also noted that “Congress recently directed the Commission to adopt rules to except from the consent requirement calls made solely to collect a debt owed to or guaranteed by the United States,” and that “its requested exemption is necessary to ensure that calls to borrowers are treated uniformly in terms of the prior express consent needed to make the call, regardless of whether the federal government or a private entity owns or insures the mortgage loan.”
The MBA also suggested conditions and requirements for the communications, such as that the calls and texts be “free-to-end user,” and that “mortgage servicers must state the name and contact information of the mortgage servicer; calls must not include any telemarketing, cross-marketing, solicitation, or advertising content; text messages and prerecorded calls must be concise; an easy means of opting out of future messages must be offered; and any such opt-out requests must be honored promptly.”
The FCC disagreed.
Rather than simply making the “free-to-end user” feature a requirement, as requested, the FCC opined that it could not be certain how MBA’s members “would comply with this requirement,” or that “exempted calls would not count against any plan limits on the consumer’s voice minutes or texts.”
Similarly, the FCC discounted and ultimately disregarded the needs of struggling homeowners all over the country, stating that “the public interest in and the need for the timely delivery of the calls described by MBA do not justify ‘setting aside a consumer’s privacy interests in favor of an exemption.’”
Attempting to explain itself, the FCC stated that, “[w]hile the calls MBA describes may help and be welcomed by some consumers, we cannot agree with MBA that they are particularly time-sensitive.”
In particular, the FCC noted, “the various federal agencies and state governments that MBA cites as requiring outbound mortgage servicing calls do not require telephone contact until a borrower is at least 20 to 36 days into the delinquency period,” such that “these messages lack the urgency of robocalls to alert consumers to possible fraudulent credit card transactions on their accounts or data breaches of their identity, when seconds or minutes count.”
The FCC further stated that, “[w]hile these calls may indeed be beneficial and desired by some consumers, mortgage servicers are free to autodial consumers without an exemption by simply relying on the prior express consent a consumer provides when including their wireless phone number on a mortgage application,” and “may also obtain new consent by one of many available means, including by email.”
In addition, the FCC rejected the MBA’s request “to harmonize the practices of callers making calls regarding the collection of a debt owed to or guaranteed by a private entity with those of callers making calls regarding the collection of a debt owed to or guaranteed by the United States,” stating that if Congress “had intended the exception to apply universally, regardless of who owned or guaranteed a debt, it easily could have done so.”
In sum, the FCC opined that it could not be certain that “the exempted calls would be free of charge to called parties.” Additionally, the FCC opined that mortgage servicers need not “be able to make or send non-time-sensitive robocalls, including robotexts, to consumers without first obtaining consumer consent.”
Therefore, the FCC denied the MBA’s petition.