Why Friday Was A Good Day For Your Credit Union

It just got a little safer to call or text your members.

Although the ADA has captured most of the industries’ attention, it’s the Telephone Consumer Protection Act that will ultimately have the biggest impact on your operations, at least if regulators get their way. A statute that was intended to deter telemarketers from interrupting your day with unwanted solicitations has morphed into a litigation tripwire, potentially applicable to almost all businesses in America including your CU.

For almost three decades the TCPA has, with limited exceptions dealing with the collection of government debt and emergencies, made it illegal for persons to make phone calls or send texts without first getting the receiver’s permission when communicating with the help of an Automatic Telephone Dialing System (ATDS.)

What exactly is an ATDS? The TCPA defines it as “equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” 47 U.S.C § 227(a) (1). In 2015 the FCC further refined this definition with a declaratory ruling explaining that an ATDS is any device that can potentially make random or sequential number generated calls with modifications. Just about every smartphone meets this definition since software can be downloaded giving it this capability.

This means that, unless they still use a rotary, just about every time your employees use a phone, chances are the TCPA is applicable. They better have to have a member’s permission before calling them or be willing to pay a $500 fine for each violation.

On Friday The Federal Court of Appeals DC ruled that the FCC went too far. CUNA and the bankers submitted a brief in opposition to the 2015 clarification.

“The Commission’s interpretation of the term ‘capacity’ in the statutory definition of an ATDS,” the Court decided, is “utterly unreasonable in the breadth of its regulatory inclusion. Nothing in the TCPA countenances concluding that Congress could have contemplated the applicability of the statute’s restrictions to the most commonplace phone device used every day by the overwhelming majority of Americans.”

That’s the good news. The bad news is I have read the decision twice and if I were a credit union, I wouldn’t change my call policies anytime soon. We are a long way from getting regulatory clarity as to when the TCPA applies and to what equipment. As the Law360 blog put it in its headline this morning:

“DC Circ. Delivers Relief, But Not Clarity, With TCPA Ruling”