Compliance Center: FCC Issues Telemarketing Rulings

The Federal Communications Commission (FCC) recently issued a package of declaratory rulings aimed at clarifying the requirements for automated telemarketing calls and texts messages under the Telephone Consumer Protection Act (TCPA). The rulings do provide some good points of clarification for credit unions, but also only vaguely address certain issues that leave determination of the applicability of the rule up to the credit union.

The FCC has received numerous requests to provide guidance on how the TCPA impacts calls covered under this rule that are placed for notifying member of fraudulent transactions, data breaches, or identity theft prevention. The FCC did review those requests and provided some guidance to financial institutions that should help alleviate some of the confusion with these messages.

Credit unions would be able to make a voice call or send a text message using an auto-dialer if these specific conditions are met:

  • The calls are not charged to the consumer;
  • The calls or texts are only directed to number provided by the member;
  • The contact information for the credit union must be stated;
  • The message must not contain any marketing (telemarketing, cross-marketing, solicitations, or advertising of any kind) or debt collection messages;
  • The calls/texts are within the applicable length limitations;
  • There cannot be more than 3 messages sent in a 3 day period for the same triggering event on the same impacted account; and
  • The credit union must present an option for the member to opt out of receiving these messages and must act on that opt-out request immediately.

If a credit union fails to meet these requirements, consent must be obtained prior to sending the messages.

Where the ruling fails to provide clarity is what actually constitutes an auto-dialed call. The rule expands the coverage of an auto-dialer to include systems that have the potential to auto-dial (even if it is not currently enabled) or the capacity to serve as an auto-dialer.

That said, the ruling does state that a degree of human-intervention can remove the call from an auto-dialed status, thus removing it from the TCPA’s scope. However, the FCC specifically did not expand on the definition of “human intervention”, leaving it open to interpretation by each institution.

The best recommendation at this time would be for the credit union to review their auto-dialer program with their legal counsel to determine if their level of human-intervention during the call process would exempt them from the TCPA rule.

The Compliance Department at the Association will be issuing a compliance bulletin that provides a more in-depth review of the major updates found in the declaratory ruling. If you have questions on the TCPA’s ruling or would like to be added to the compliance bulletin mailing list, please send the compliance team an email at compliance@nwcua.org.

Compliance Question of the Week

Under the Servicemember’s Civil Relief Act, what is the interest rate when a member is on active duty, do we still get to collect payments while the member is on active duty?

The interest rate under this law is 6% for members who are on active duty. Active duty is whenever a member of the Reserves has been called to full-time active duty. Although the credit union has to lower the interest rate, the credit union still gets to collect payments.

The credit union only has to give this reduced interest rate for obligations that the member incurred before the member was called to active duty. For example, if the member takes out an extension on a home equity line of credit while the member is on active duty or after the member’s active duty has ended, the credit union does not have to reduce the interest rate on this new advance to 6%.

Interested in learning more?

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Legal Briefs

National Credit Union Administration (NCUA)

The NCUA announced that it will hold a webinar on Wednesday, July 29th to discuss the FFIEC’s new Cybersecurity Assessment Tool. Credit unions can register for the webinar here.

The July 2015 issue of the NCUA Report is now available.

NCUA Chairman Debbie Matz delivered testimony before the House Financial Institutions Subcommittee. Matz’s testimony included information on support for small credit unions, regulatory review efforts, improvements to examinations, and the revised proposed risk-based capital rule.

The NCUA issued a Board Action Bulletin detailing the action taken at the July 2015 Board Meeting. The bulletin includes a a fixed-asset cap elimination for federal credit unions, an announcement that the NCUA’s budget will be reduced by more than $1.3 million for remainder of the year, and a final rule amending the agency’s capital planning and stress testing rule.

National Credit Union Administration (NCUA)

The NCUA announced that it will hold a webinar on Wednesday, July 29th to discuss the FFIEC’s new Cybersecurity Assessment Tool. Credit unions can register for the webinar here.

The July 2015 issue of the NCUA Report is now available.

NCUA Chairman Debbie Matz delivered testimony before the House Financial Institutions Subcommittee. Matz’s testimony included information on support for small credit unions, regulatory review efforts, improvements to examinations, and the revised proposed risk-based capital rule.

The NCUA issued a Board Action Bulletin detailing the action taken at the July 2015 Board Meeting. The bulletin includes a a fixed-asset cap elimination for federal credit unions, an announcement that the NCUA’s budget will be reduced by more than $1.3 million for remainder of the year, and a final rule amending the agency’s capital planning and stress testing rule.

Federal Reserve Board (FRB)

The FRB released its annual report on government-administered prepaid cards.   

The FRB announced that it approved a final rule requiring the largest and most systemically important U.S. bank holding companies to strengthen their capital positions.

Office of the Comptroller of the Currency (OCC)

OCC Chairman Curry presented remarks before the New England Council regarding the top risks facing national banks and federal savings associations. The risks discussed included interest rate risk, regulatory compliance risk, and cybersecurity risks.

U.S. Department of Defense (DOD)

The DOD announced that it has finalized the changes to the Military Lending Act Rule. The rule makes several changes, including expanding its coverage to open-end lines of credit and credit cards.

Financial Crimes Enforcement Network (FinCEN)

FinCEN issued Advisory FIN-2015-A002, updating its list of jurisdictions with strategic AML/CFT deficiencies.

The Financial Action Task Force (FATF) has issued a report titled “Money Laundering/Terrorist Financing Risks and Vulnerabilities Associated with Gold”.   The report details why gold is attractive to criminal organizations and presents red flag indicators that can help financial institutions detect and report suspicious activities related to gold.

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of July 23, 2015. The last update prior to this was July 21, 2015.

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Compliance Center: HUD Issues Guidance on Multifamily Assisted and Insured Housing Based on Equal Access to Housing Rule – See more at: http://nwcua.org/member-resources/anthem/compliance-center-hud-issues-guidance-on-multifamily-assisted-and-insured-housing-based-on-equal-access-to-housing-rule#sthash.NkFiQO4A.dpuf

Questions about this story? Contact James Pearson: 206.340.4790, jpearson@nwcua.org.

Posted in Compliance News, NCUA.