United States: Update On Initiation Of FCC Rulemaking To Implement The New TCPA Exemption For The Collection Of Government Debt

Last Updated: February 9 2016
Article by Judith L. Harris

Some of you may remember that back in early November 2015, I wrote about a then little-noticed provision slipped into the Bipartisan Budget Act of 2015. That provision, designed to find more revenues to offset government spending (and thus help to reduce the federal deficit), created an exemption from the Telephone Consumer Protection Act (TCPA) for telephone calls or text messages "made solely to collect a debt owed to or guaranteed by the United States." The provision outraged many of the more liberal members of Congress. (Senator Markey, for example, with the support of a number of other members of the Senate, introduced legislation to repeal the exemption, but that bill to date has been unable to gain traction.)

Similarly, Tom Wheeler, Chairman of the Federal Communications Commission (FCC) – whose job it is to enforce the TCPA – has also repeatedly expressed his displeasure with the new law and has yet to move on the Congressional mandate instructing the Agency to act within nine months to adopt implementing regulations to balance business with consumer privacy interests. That might be changing, however. In a presentation this past Friday (February 5) to the FCC's Consumer Advisory Committee (CAC), the FCC's Consumer and Government Affairs Bureau clearly implied that the release of a Notice of Public Rule Making (NPRM) is imminent. After all, the new regulations must be in place by August 2, 2016.

Among the questions that will likely be asked in the NPRM are: (1) who can make calls under the exception; (2) what does it mean that the exempt call or text must be "solely" to collect a debt; (3) should the number of calls and/or the period of time between calls be limited; and (4) must a consumer actually be in default before an exempt call may be made, or should servicing calls also be included in the exemption. I, for one, would like to see another question included in the NPRM as well:

"Should the collectors of non-governmental debt be given the benefit of the same exemption, subject to the same conditions that the FCC will establish for the collection of government debt?"

To do anything else would really expose the craven hypocrisy that underlies the Congressional action. Consider, for example, that the White House, known to support ever-more government enforcement of the TCPA, released a comment that would have been funny were it not for how the TCPA has harmed highly reputable businesses – large and small – just trying to protect their legitimate interests. That statement read, in relevant part:

"This provision clarifies that the use of automatic dialing systems and prerecorded voice messages is allowed when contacting wireless phones in the collection of debt owed to or granted by the United States ...In an age where more and more Americans rely on cell phones, often exclusively, it is important to be able to alert those who owe money to the government if they are in danger of default, which can harm their ability to secure credit long term. In the case of Federal student loan debt, if loan servicers are able to contact a borrower, they have a much better chance at helping that borrower resolve a delinquency or default."

Doesn't this statement sound strikingly similar to (unsuccessful) arguments made by so many associations and individual companies when they argued for more flexibility in allowing robocalls for debt collection purposes in the FCC's most recent rulemaking, now on appeal in the D.C. Circuit?

At Friday's CAC meeting, the staff attorney who presented the robocall agenda item concluded with the following advice to the committee members, "if you have a burning question you want included in the NPRM, get it to us very, very soon."

To that end, Reed Smith will convene a call this Friday, February 12, 2016, at 12 p.m. ET, to discuss the possibility of forming a coalition to advocate for an exemption or safe harbor to protect calls made for the sole purpose of collecting private debt, under the same circumstances that the FCC will be delineating for the collection of government debt. If you, and/or any trade association to which you belong, are interested in exploring this possibility, please click here to register. Dial-in details will be circulated after you have registered.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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