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July 2016 TCPA Compliance Monitoring Report

This past month, the FCC was asked to exempt mortgage servicing calls from TCPA consent requirements. The petition, submitted by a mortgage servicing industry group, noted that many  of these calls are required by government regulation. Subjecting these mandated calls to TCPA consent requirements hinders the mortgage servicing companies from complying with these laws. The FCC is expected to solicit comments on the petition in the coming weeks.

The TCPA has created a compliance problem according to the petitioning industry group, the Mortgage Bankers Association.  “Mortgage servicing calls are required by federal and state laws, regulations, and requirements other than the TCPA,” the group wrote.  “These requirements were carefully designed by federal agencies and state legislatures … to effectively communicate important information to residential mortgage borrowers to help borrowers avoid foreclosure and its grave financial consequences.”

But under current TCPA laws, mortgage servicing companies do not always have the ability to place calls to borrowers.  Right now, a mortgage servicing company can place pre-recorded calls, also known as “robocalls,” to residential landlines under relaxed landline rules that permit calls that do not involve advertising or telemarketing.  When calling mobile phones, however, companies have to be more careful and follow a different set of rules.  The TCPA requires prior express consent when making any non-emergency call using an autodialer or prerecorded voice to a wireless telephone number, whether or not the call consists of telemarketing.  The FCC has determined that these rules include text messaging.  As a result, mortgage servicers cannot make calls or send texts to mobile phone lines of borrowers without prior express consent.

The Mortgage Bankers Association petition comes as the FCC deliberates on the final contours of a rule that will permit calls to mobile phones specifically where a debt is owed to or guaranteed by the United States.  Congress mandated the new rule in the Bipartisan Budget Act of 2015 but did not specifically address mortgage servicing where a debt is not owed or guaranteed by the United States government.  As the FCC works to relax TCPA rules on debt collection, the Mortgage Bankers Association seeks to push the agency to go further: “this petition would ensure the TCPA does not impact mortgage servicing calls to any borrower, not just those whose mortgage loans are owed to or guaranteed by the United States,” the group wrote.

In its petition, the Association accepts limitations on prior express consent requirements similar to those applicable to package delivery services, healthcare providers, and financial institutions:

• calls and texts must state the name and contact information for the mortgage servicer;
• calls and texts should not include telemarketing or advertising;
• calls and texts should be concise;
• servicers must offer easy means of opt-out; and
• servicers must honor opt-out requests promptly.

The petition defines mortgage servicing as “all actions, including all communications, related to the receipt and application of payments to the terms of any loan or security agreement, execution of other rights and obligations owed under the loan or security agreement, the modification of any terms of the loan or security agreement, and any other loss mitigation options.”  This includes calls made by HUD-approved housing counselors.

Ultimately, the FCC will be required to weigh the benefits of mortgage servicing calls against the need for consumer privacy from unwanted robocalls, one of the top complaints received by the FCC and a priority of numerous consumer groups. 

Still, comments to the FCC submitted this past month seemed to point to a growing consensus in support of relaxing TCPA restrictions with regard to mortgage servicing.  The Student Loan Servicing Alliance, an industry group, pointed to its statistics that showed that at-risk populations of borrowers have a higher incidence of not providing consent to receive phone calls, even though servicers can often assist in alleviating borrower problems.  Even the Consumer Financial Protection Bureau, a federal agency, agreed with the need for updating TCPA, writing, “servicing calls can be beneficial to consumers.”

If you have any questions about the TCPA or its applicability to the mortgage servicing industry, or have an interest in submitting comments on the Mortgage Bankers Association petition, please do not hesitate to contact Seth Williams at slw@commlawgroup.com, Jane Wagner at jlw@commlawgroup.com, or Nate Hardy at njh@commlawgroup.com.