Vacate TCPA ruling, CUNA, bank trades ask court

December 3, 2015

WASHINGTON (12/3/15)--The recent Federal Communications Commission (FCC) omnibus Telephone Consumer Protection Act (TCPA) order is arbitrary, capricious and should be vacated, CUNA told the U.S. Court of Appeals for the District of Columbia Wednesday.

CUNA, along with the American Bankers Association and Independent Community Bankers Association, filed a joint amici brief stating the order “severely restricts the ability of financial institutions and other callers to engage in useful, and often urgent, communications with their customers and members.”

“The FCC’s TCPA order is restricting important communications between credit unions and their members that can help prevent fraud, identify theft, and provide other important account updates,” said Ryan Donovan, CUNA’s chief advocacy officer. “We believe the FCC acted in a manner that is harmful to consumers, and is an abuse of the authority Congress granted to it.”

The FCC released the order July 10, and it immediately went into effect without being put out for a notice and comment period. The brief is a very important addition to the lawsuit because it outlines specific concerns to credit unions and other smaller financial institutions. It notes that if the TCPA order is upheld, its “onerous and burdensome” requirements may force those entities that have limited staff and resources to restrict wireless communications with their members and customers.

Furthermore, the brief notes that the risk of “draconian liability” under TCPA class actions threatens the very livelihood of small financial institutions, and their ability to serve members and customers.

“Surely when passing the TCPA decades ago, Congress did not have in mind to arbitrarily scrutinize and limit communications between credit unions, who are not-for-profit, member-owned financial cooperatives,” Donovan said. “We hope that the court will recognize the absurdity of some of the new requirements the FCC has outlined.”

Some of the specific consequences of the order that the brief takes issue with include:

  • The inability to use automated calling methods delay the institution’s ability to contact credit union members about fraud and identify theft and other important account information that can help members avoid hardship or embarrassment;
  • The expanded scope of the definition of autodialer, which effectively prohibits financial institutions from using many efficient dialing technologies. The brief argues that this leaves financial institutions with no useful guidance as to the kinds of dialing devices they may use to contact their members of customers with communications that must be made promptly and in substantial volume;
  • The ruling provides a strong disincentive for a financial institution to make calls to its customers or members as a result of the onerous guidance about calling reassigned numbers. The potential liability for calls made in good faith to parties who have consented to receive them, but whose telephone number has subsequently been reassigned without notice to the financial institution, threatens to curtail important and valued communications;
  • The problematic guidance about how a consumer can revoke consent. The brief notes that the TCPA order requires financial institutions to receive revocations through any and all communication channels by which institutions receive communications and by any employee who works for the institution or, potentially, who works for a partner of the institution; and
  • The practical limitations of the financial institutions exemption. The exemption is of particular concern to small financial institutions, and as articulated in the TCPA order offers very limited relief. The brief states that some small financial institutions have even concluded that the restrictions established by the FCC in the TCPA Order result in a de facto ban on their ability to utilize the exemption.

Since the FCC’s order, CUNA has written to Congress with its TCPA concerns, outlined credit union concerns to the National Credit Union Administration and the Consumer Financial Protection Bureau, met with the FCC to discuss concerns and hosted a webinar on potential issues for credit unions.