Posts tagged ‘Department of Justice’

Why Robocall Crackdown Is Hurting Your Credit Union

Contrary to popular belief the biggest obsession in DC right now isn’t the impeachment trial; it’s auto dialing. While it’s hearting to see that the Democrats and Republicans can agree to something, the result of this bi-partisan obsession is that it’s trickier for your credit union to legally communicate with its members than it should be.

First we have yet another decision– Glasser v. Hilton Grand Vacations Co., LLC, No. 18-14499 (11th Cir. 2020)- interpreting what an auto dialer is for purposes of the Telephone Communications Protections Act. Remember, whether or not your credit union is subject to the TCPA is totally dependent on whether or not it is using an auto-dialer when it reaches out and touches someone. Law 360 is reporting that the 11th Circuit refused to allow an individual to go forward with this class action lawsuit claiming a violation of the TCPA.

The case got my attention because the court agreed with an earlier decision by the Court of Appeals for the D.C. Circuit which I have blogged about – ACA International v. Federal Communications Commission- which rejected an expansive interpretation of auto-dialer championed by our friends on the West Coast. The split between the circuits increases the likelihood that the Supreme Court will have to decide how to interpret the TCPA.

Of course, the more logical step would be for Congress to amend the TCPA to make sure that it outlaws abusive telemarketing as opposed to acting as a tripwire for class action lawsuits. But the odds of anyone in Congress voting for a bill which could be attacked as weakening the TCPA are about as good as Donald Trump being removed from office by the Senate.

All this is happening against the backdrop of heightened regulatory vigilance of auto dialers. For example, the DOJ is seeking to shut down two auto dialer companies that facilitated auto dialer operations based in New York and Arizona, which the government claimed specialized in ripping-off the elderly. In addition, regulators are continuing to review whether even more TCPA regulations should be amended. As a matter of fact, it was this comment letter from CUNA last night that got me thinking about this subject for today’s blog.

There is a reason I am providing you with this parade of horribles. No one likes robocalls, or has sympathy for companies that facilitate shams intended to pressure people into giving up their money. But there are legitimate businesses, such as credit unions, which use this technology every day to communicate with their members about legitimate topics. The current frenzy has regulators using a hatchet to deal with legitimate issues when they should be using a scalpel. I don’t see this ending any time soon. So for those of you who haven’t done so already, take a good look at the type of technology you are using and start thinking of ways that you can avoid getting caught in the regulatory dragnet.

 

January 30, 2020 at 9:43 am Leave a comment

ADA Compliance Deadline Looms

First, the bad news.  March 15th is the deadline by which you have to comply with regulations ensuring that you have  ATMs that are accessible to the visually impaired.  Remember that the ultimate goal is to enable a visually impaired person to conduct ATM transactions without assistance.  Generally, this means that at least one of your interior and exterior ATMs has to have speech enabled technology for the visually impaired, including the ability to read deposit balances and other information that people need to conduct ATM transactions.  I have heard some credit unions talk about relying on an exception for complying with the regulation for modifications that are unduly burdensome, but remember this is actually a defense that can be raised if you are sued, not an exception to complying with the regulations.

What’s the good news?  The Wall Street Journal is reporting that an estimated 50-60% of financial institutions won’t be in compliance with the regulation by the 15th.  And since the Justice Department is responsible for enforcing this regulation, many institutions are apparently taking a calculated gamble that they won’t actually need to implement the requirement any time soon since the Justice Department only acts as a result of customer complaints.  Speaking of taking a gamble. . .

Region 1 Criticized over Credit Union’s Failure

The Office of the Inspector General, which has the responsibility for conducting post-mortems on credit union failures that pose a material risk to the Share Insurance Fund, has come out with a report critical of NCUA’s supervision of Vensure Federal Credit Union, which was being used to facilitate online gambling.  Even though the credit union was based in Arizona when it was liquidated, until 2010 it was a small New York State based credit union, so Region I received a fair amount of criticism in the report.  In April of 2011, the Department of Justice indicted some major online Poker companies and seized all the funds of one of Vensure’s members, Trinity Global Finance, which was Vensure’s largest single depositor at the time of the seizure.  Vensure derived almost all of its income from transaction fees generated for processing Trinity’s internet gambling transactions. 

The OIG concludes that:

Examiners must perform adequate due diligence when working with a new management team and board to gain an understanding of the credit unions business plan and to properly assess management’s competency. 

Examiners must be aware of changes to the credit union’s business model and question why these changes were made. 

Examiners must identify significant changes or questionable transactions on the balance sheet. 

Examiners should seek assistance from senior examiners or other experts in the area of ACH transactions if they cannot find a satisfactory answer “for why numbers are rapidly increasing or decreasing.” 

They say that nothing makes you a supporter of women’s rights quicker than having daughters, and they may have a point.  Happy International Women’s Day!

March 8, 2012 at 7:44 am Leave a comment


Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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