ABA: FCC Undermines Congress on Debt Restructuring Robocalls

The American Bankers Association and the Consumer Bankers Association today challenged the Federal Communications Commission’s proposed rule regarding non-telemarketing robocalls made to collect debts owed to or guaranteed by the United States. The groups noted that the FCC’s proposal does not fully comport with the Bipartisan Budget Act of 2015, which exempted from the Telephone Consumer Protection Act’s prior consent requirements autodialed and prerecorded calls “made solely to collect a debt owed to or guaranteed by the United States.”

With half of U.S. households now “wireless only,” Congress saw a need to ensure that borrowers could communicate with creditors and servicers about their debts, particularly about loan modifications and other foreclosure alternatives. However, the FCC “improperly replaced the policy determination made by Congress with its own,” ABA and CBA said, exempting calls only for delinquent or defaulted borrowers, excluding numbers that unbeknownst to the caller no longer belong to the borrower and extending TCPA restrictions to landline calls.

“Calls made pursuant to existing servicing regulations and requirements are not telemarketing ‘robocalls’ that the TCPA’s consent requirements were intended to prevent,” the groups said. “Rather, they are calls to connect borrowers with live agents for the purpose of educating delinquent borrowers about options offered by a creditor that help the borrower to avoid foreclosure.”

ABA and CBA urged the FCC to apply the exemption as expansively as Congress intended, including to mortgage loans owed to or guaranteed by Fannie Mae and Freddie Mac. They also urged the commission to harmonize its rule with well-established mortgage servicing practices and regulatory requirements — with many of which it is currently in conflict. For more information, contact ABA’s Jonathan Thessin.