FCC Denies Exemption from TCPA’s Prior-Express-Consent Requirements for Mortgage Servicing Calls


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December 2016 TCPA Compliance Monitoring Report

On November 15, 2016, the Federal Communications Commission’s (“Commission”) Consumer and Governmental Affairs Bureau (“CGB”) released an Order denying a Petition filed by the Mortgage Bankers Association (“MBA”) for an exemption from the prior-express-consent requirements of the Telephone Consumer Protection Act (“TCPA”). MBA’s Petition sought an exemption from the TCPA’s prior-express-consent requirements for non-telemarketing residential mortgage servicing calls to wireless telephone numbers.

The TCPA expressly allows the Commission to grant exemptions to the requirement that autodialed calls to wireless numbers necessitate the prior-express-consent of the called party, and the Commission has recently given exemptions to certain calls made by healthcare providers and financial institutions. However, the Commission’s previous exemption decisions have emphasized two requirements for parties seeking an exemption: (1) the call must not result in a charge to the recipient (a statutory requirement); and (2) the call must involve time-sensitive information.

MBA’s Petition defined 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” and included calls made by HUD-approved housing counselors. According to MBA, permitting autodialed mortgage servicing calls would allow mortgage servers to more effectively advise mortgagees about their options. Such calls would have included, among other things, calls related to the reason for delinquent payments, whether the borrower has abandoned or vacated the property, and homeowner counseling information. MBA also argued that many mortgage serving calls are required by various federal loan guarantee programs and consumer protection statutes.

In denying MBA’s Petition, CGB found, as a threshold matter, that MBA had not established that the calls subject to the exemption would result in no charge to end users. The Commission’s free-to-end-users requirement also prohibits an exempt call from counting against any limits in the called party’s voice minutes or texts.

While failure to meet the statutorily required free-to-end-users mandate precluded MBA’s exemption, CGB also considered whether MBA’s request served the public interest. In considering prior-express-consent exemptions, the Commission requires that exempt calls include time-sensitive information, such as financial account breach information or medical appointment reminders. Unlike those situations, CGB pointed out that even where consumer protection statutes require certain mortgage servicing calls, the calls do not require immediate telephone contact. Moreover, CGB pointed out that mortgage servicers are permitted to make calls to wireless numbers with the prior-express-consent of the called party (which CGB said mortgage servicers have ample opportunity to obtain in their regular contact with mortgagees) or by making calls without using an autodialer. Therefore, even if MBA had shown that mortgage servicing calls would be free to the called party, CGB found that MBA’s exemption request was not in the public interest.

On December 15, 2016, MBA requested review of CGB’s Order by the full Commission.  The Application for Review is currently pending.

Other TCPA News and Notes:

CGB released a Public Notice seeking comment on a Petition filed by bebe stores, inc. seeking a retroactive waiver of the Commission’s rules. The Petition asks for a waiver of the Commission’s prior written consent standard from Oct. 16, 2013 (its effective date) through October 7, 2015 (a period three months after the Commission clarified that written consents obtained prior to Oct. 16, 2013 were not grandfathered under the new rules). The Commission has granted similar retroactive waivers in the past. Comments are due by January 6, 2017, and reply comments are due by January 23, 2016.

If you have any questions about the Commission’s prior-express-consent rules or would like to file comments regarding the waiver of the Commission’s TCPA rules, please contact Seth Williams at slw@commlawgroup.com, Jane Wagner at jlw@commlawgroup.com, or Nate Hardy at njh@commlawgroup.com.

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