A Regulatory Win for Credit Unions Expected to Improve Member Communications


A federal appeals court Friday overturned key provisions of a 2015 Telephone Consumer Protection Act (TCPA) Declaratory Ruling, which had hindered some credit unions’ communications to members.

The ruling, issued by the Federal Communications Commission (FCC), broadly defined any telephone other than analogue phones, as auto-dialers.  As a result, some credit unions converted their call center phones to costly and inefficient analogue devices.

The Court of Appeals for the District of Columbia Circuit found that a provision of the Ruling intended to limit robocalls was too broadly defined.

“The FCC had expanded the definition of what constituted an automatic telephone dialing system to the point that it may have been construed as applying to anyone with a smartphone,” said John Trull, AVP of Regulatory Advocacy for the Northwest Credit Union Association (NWCUA).  “The FCC’s interpretations under the TCPA created compliance challenges for credit unions trying to contact their members with important account information.”

The court also vacated the FCC’s policy on calls made to numbers belonging to people who had consented to receive calls but that had since been reassigned to non-consenting people. The court ruled the FCC’s safe harbor (which allowed only one call before incurring liability) was “arbitrary and capricious.”

The court upheld the FCC’s approach to handling how call recipients can revoke previously granted consent to calls but concluded that a caller and call recipient may contractually agree to specific revocation mechanisms.

The Credit Union National Association (CUNA) filed a brief asking the court to overturn provisions of the Declaratory Ruling, arguing that credit unions need to communicate with members quickly and efficiently to prevent and mitigate fraud and ID theft, and to help members avoid unnecessary fees.  The Appeals Court ruling aligns with most of the arguments made by CUNA.

“We’ve already heard that one of our member credit unions plans to immediately disconnect the analogue phones at its call center,” said Trull. “Northwest credit unions will once again be able to quickly communicate with their members, to stop fraud, deter ID theft, and provide the very services members expect.”

Posted in Advocacy News.