FCC Takes Narrowest Read of Congress’ Exemption to the TCPA for Federally Guaranteed Loans

TCPA - Don't call me!Commentary on the Notice of Proposed Rule Making, Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02-278, issued May 6, 2016.

There was much ado about the Federal Communications Commission’s (“FCC”) implementation of the Telephone Consumer Protection Act (“TCPA”) in its June 2015 Omnibus Declaratory Ruling and Order (“Order”).  In that Order, the FCC responded to 21 petitions by a number of companies and trade associations who sought relief or clarification regarding the requirements of the TCPA.  The result was a sweeping expansion of the scope of the TCPA to prevent legitimate businesses from reaching Americans on their mobile phones.  Indeed, the Order was so broad that trade associations immediately appealed it to the DC Circuit and those appeals are pending.

But wait.  It wasn’t just businesses affected by the Order.  Federal, state, and local government entities could not collect on debts owed to them either.  The United States might not be able to collect on its debts?  Surely, Congress had to respond, and swiftly.  They did just that through the Balanced Budget Act Amendment of November 2015, enacting legislation codifying an exemption to the TCPA to allow federal debt collectors to robocall consumers on their home and cellphones without their prior express consent, and requiring the FCC to implement the exemption by this August.

The FCC issued its lengthy Notice of Proposed Rulemaking (“NPRM”) on Friday, seeking public comment by June 6, 2016 to address a one clause change to the statute, section (b)(1)(A)(iii), which prevents robodialed calls to mobile phones without the prior express consent of the called party — adding the language “unless such call is made solely to collect a debt owed to or guaranteed by the United States.”

The NPRM proposes that covered calls include collection and servicing calls after the delinquency to the person or persons obligated to pay the debt.  The Commission seeks comment on the meaning of “owed to or guaranteed by the United States,” suggesting that this may include federal student loans, Small Business Administration loans, and federally guaranteed mortgages.  Further, the NPRM restricts the number of covered calls to three per month and per delinquency, including prerecorded or artificial voice calls.  Finally, consumers would have the right to stop calls at any point and the Commission seeks comment on the permissible ways to opt out of future calls.

Thus, the FCC has spoken and the relief is scant.  The Order to be adopted will likely bear strong resemblance to the proposals in the NPRM.  So the FCC will follow Congress’ orders, but through the narrowest of lenses.  To the federal, state and local government entities hoping for a break in collecting their debts, the message is clear — keep waiting.  Help is not on the way.

Divya Gupta

Divya Gupta

Divya Gupta is a commercial litigator Partner with one of the nation’s most knowledgeable Telephone Consumer Protection Act (TCPA) defense-teams. She is experienced in handling complex cases in state and federal courts, both in-house and as outside counsel. Divya is particularly skilled in defending banks, finance companies, and other lenders in both individual and class action TCPA cases. Divya also has experience advising major financial institutions on TCPA compliance matter and regarding the applicability of the TCPA to new and emerging products and services. Likewise, she is further adept in handling matters involving the Fair Credit Reporting Act (FCRA).

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