Budget Compromise Gives TCPA Exception to Debt Collectors for Government-Backed Debt


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November 2015 TCPA Compliance Monitoring Report

Amid the news of a long-term budget compromise being signed into law on Wednesday by President Obama, few observers noticed the changes to the Telephone Consumer Protection Act (“TCPA”) tucked into a corner of the legislation. The Bipartisan Budget Act of 2015 (“2015 Budget Act”) will permit autodialed or prerecorded calls to both cell phone and residential numbers for the purpose of collecting a debt “owed to or guaranteed by the United States.”

Section 301 of the 2015 Budget Act amends the TCPA’s restrictions on autodailed calls to cell phones and artificial or prerecorded voice calls to cell phone and residential numbers by exempting calls “made solely to collect a debt owed to or guaranteed by the United States.” Because the changes apply only to debt owed to or guaranteed by the government, debt collectors will need to make sure they understand what type of debt is being collected before calling a debtor. And, while it will undoubtedly take some fleshing out by the Federal Communications Commission (“FCC” or “Commission”), the courts, or both, the amendments limit debt collectors to calls solely related to the collection of government-backed debt.

For consumers, the changes are most likely to affect student loans because of the government’s significant involvement in the student loan market. The amendments may also change collection practices for home mortgages since many home loans are ultimately backed by the government, and some other loans backed by government programs, such as small business loans made through the Small Business Administration, could be impacted as well.

The 2015 Budget Act permits the Commission to “restrict or limit the number and duration” of calls made to cell phone numbers to collect government debt, and it gives the Commission 9 months to prescribe regulations implementing the changes to the TCPA. Notably, this potential limitation on the number and duration of debt collection calls does not apply to residential numbers. However, other debt collection laws, including the Fair Debt Collection Practices Act and various state laws, will still apply to debt collection calls.

If you have any questions about your company’s compliance with the TCPA, please contact Linda McReynolds at lgm@commlawgroup.com, Jane Wagner at jlw@commlawgroup.com, or Robert Jackson, rhj@commlawgroup.com.

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