FCC Gets Contradictory Advice on Federal Robocall Exemption

Americans for Financial Reform (AFR), a coalition of groups supporting changes in the financial industry, said the controls on robocalls proposed by the FCC are a good start but don’t go far enough. For example, the FCC proposed that the number of calls be limited to three per month per loan, AFR said. “Because some consumers have multiple loans, we recommend that the number of calls or texts permitted to be made without consent should be limited to three calls per servicer or collector,” the filing in docket 02-278 said. “Without this limitation, some consumers could be receiving between 30 to 45 robocalls a month to their cell phone.”

The FCC should also include the consumer protections in the body of the rules, AFR said. “If the protections are left in the general material that precedes the regulation, it will be very difficult for individuals, compliance attorneys or courts to research and find the rules.”

The United Negro College Fund said the rules should restrict the use of robocalls to collectors with a track record of making those who default on student loans aware of their options. “Entities that have poor performance in ensuring student borrower access to available loan repayment and rehabilitation options should not be permitted to use auto dialer technology,” the fund said.

But the Student Loan Servicing Alliance said the FCC goes too far in the NPRM. The FCC’s only authority under the act “is with respect to limits on the number and duration of calls, and its authority should be exercised in a manner that is consistent with the intent of Congress to permit those trying to collect money owed to the United States to do so in good faith without fear of ‘gotcha’ lawsuits,” the alliance said in comments. “Many of the proposals and questions in this NPRM relate to issues that are not within either the FCC’s expertise or its authority under the BBA, and should not be addressed in this rulemaking.”

The debt collection industry is “already heavily regulated” and the FCC shouldn't restrict the exemption Congress intended for federal debt collection, said ACA, which represents debt collectors. “It would be inappropriate for the Commission to use its rulemaking authority to encumber the exemption with so many restrictions and limitations that it will have very little practical impact in fostering the communication between consumers and debt collectors,” ACA said. “The Commission only has authority to implement the Budget Act amendments, not rewrite them through draconian rules that will render the exemption meaningless.”

The FCC should interpret the exemption broadly, said the American Bankers Association and the Consumer Bankers Association in a joint filing. The exemption should apply to “all loans or other debt ... insured, guaranteed, coinsured, or reinsured, in whole or in part, by the U.S. government or any agency or instrumentality thereof, directly or indirectly” and all cases where the government may be required to reimburse a third party when a debt goes unpaid, the banking associations said. The exemption should cover, for example, Federal Housing Administration loans and the Department of Veterans Affairs Home Loan Program, the groups said.

The Consumer Mortgage Coalition, which represents lenders, said its industry is critical to the economy and sought an exemption to the TCPA for home mortgage collection. “Early intervention is critical to foreclosure prevention because the amount due and unpaid on a delinquent mortgage loan can increase quickly,” the coalition said in a filing. “Mortgage loans are usually a consumer’s largest debt, so that missing even a few payments can create a large arrearage. Once a consumer believes it is impossible to catch up, the consumer usually stops making any mortgage loan payments.”