Posts tagged ‘FCC’

Time for Congress to Update the TCPA

It seems that hardly a week goes by without some court ruling further confusing the issue of when businesses, including financial institutions, are violating the TCPA. What’s more, the courts are as confused as businesses when it comes to what the statute requires. Consequently, I would say that one of the most important things Congress can work on now that its summer recess is over is updating the TCPA.

Let’s face it, as it currently stands, there is just too much confusion about when the statute does and does not apply. On the one hand, we have a ruling by the Court of Appeals for the D.C. Circuit clearly stating that it should not be interpreted as extending to phones simply because they have the capacity to auto-dial. On the other hand, there was a ruling months later by the Court of Appeals for the Ninth Circuit which seems to reach the exact opposite conclusion. Recall Marks v. Crunch San Diego, LLC.

When this statute was passed by Congress, telemarketing was a meddlesome- bordering on obnoxious- business practice in which low-paid dialers would call people up and try to pitch them on something they really didn’t need. Some of that still exists, and it should be dealt with, but the cell phone is now an integral part of commerce and customers expect that the businesses with which they work will text them and provide them with needed information. This is a development that was inconceivable to the crafters of the TCPA, and with which Congress must now grapple. Its failure to do so is ultimately hurting commerce, and hurting consumers.



September 9, 2019 at 9:34 am Leave a comment

Previewing What Promises To Be A Wacky Week

To understand the New York State legislature in the closing week-and-a-half of the legislative session, you should think back to your school days. Deadlines which seemed to be in the distant future suddenly arrive and all that work you swore you had already done needs a lot of fine tuning. Get ready for the late nights.

So it goes for the legislative session this week as the legislature continues to consider a wide variety of bills that could impact your credit union operations. I will try to keep you posted as things unfold.

One of the bills I’ll be keeping an eye on, which has gotten the attention of the New York Law Journal, would effectively reverse regulations promulgated by the Department of Financial Services placing strict new limits on the marketing activities of title insurers in the Empire State.

Another reason this promises to be a wacky week is that economists, politicians, Presidents, candidates and talking heads of all political persuasions will continue to extrapolate prognostications about the future of the economy. If the economy does end up slipping into recession marking an end to one of the longest economic expansions in history then Friday’s job report in which an underwhelming 75,000 new jobs were created will be seen as a key moment.

Similarly, we have seen a dramatic decrease in bond yields as investors run for the safer cover of bonds. It will be interesting to see where and when this trend ends. It will also be interesting to see if and when quickly the fed decides that it needs to cut interest rates. Obviously all of this has an impact on your net interest margins.

This week will also give us more time to analyze how best to regulate payday lending. On Thursday the CFPB took the unusual step of providing a red line version of its regulations while announcing that it was delaying the date by which lenders had to comply with payday lending regulations.

I am also curious to find out if the FCC faces additional pushback now that it has rushed through regulations making it easier for telephone companies to block “robocalls.” I put robocalls in quotes because no one really knows what exactly will be blocked now that this regulation has been promulgated. This article in the WSJ summarizes the frustration that so many of us feel when trying to explain to people why the FCC’s action makes no sense. “America’s telecommunications regulator passed rules last week that will let phone companies automatically block more robocalls. It hasn’t yet said what, exactly, constitutes such a call.” That’s right. The regulation actually doesn’t ban robocalls. It bans calls made with equipment that can make robocalls.

This has the look and feel of a regulation that needs to be challenged on the grounds that the regulators have violated the Administrative Procedures Act. Perhaps we will see that happen this week as well.

June 10, 2019 at 9:16 am Leave a comment

D-Day For Robocalls?

I found myself yelling at my radio this morning as either NPR or Bloomberg was reporting that the FCC was poised to take final action today on a proposal to make it easier to block robocalls.

I was yelling at the broadcast because the proposal does much more than that. I might be able to live with the regulation if we could come up with a legitimate definition of what a robocall is but alas, the definition is dependent not on the nature of the communication but on the type of equipment used to make the robocall.

Second, by giving telephone service providers the authority to block all the member’s unwanted calls unless they opt in to receiving them, the proposal raises a host of compliance conundrums. For example, by the end of the day today you may very well find it more difficult to reach out to delinquent homeowners who the CFPB says you have to discuss loss mitigation options with. And what’s going to happen when there is a conflict between the documented approval you have received to contact members and the fact that the member has not affirmatively opted in to receiving electronic communications.

By the way, the FCC is taking these steps notwithstanding some great work by CUNA and the industry. As this article report from Fox Business makes clear CUNA was able to place itself in the forefront of these legitimate concerns notwithstanding the great next speed at which the FCC is determined to jam this regulation through. Stay tuned.

The Chase Is On

The Albany Business Review is reporting that Chase plans to open several new branches in the Albany Metropolitan area marking its first aggressive push into the market. The Review notes that the move reflects a broader strategy on the part of the bank to both consolidate branches and concentrate on growing in the major metropolitan areas.

BDD Bill Advances

Finally some good news to report this morning. The efforts of credit unions to become eligible for participation in the state’s banking development district program took an important step forward yesterday when the legislation was voted out of the Bank’s Committee. It now goes on to Ways and Means. We will keep you posted on future developments.

June 6, 2019 at 9:02 am 2 comments

The Bankers Are Right

If Nixon can go to China, then I can darn well compliment the American Bankers’ Association when it makes a good point. That is what I am doing today.  Besides, if the bankers succeed in getting a petition approved the Federal Communications Commission (FCC), credit unions will benefit as well.

We all know that identity and data theft prevention are all the rage. Suppose that you are approached by a vendor with a great new system that will send out automated voice messages to a member’s cell phone anytime there is an indication that fraudulent activity may be taking place. Given the volume of potential fraud alerts, as well as the speed at which hackers can do their damage, using automated voice messaging and texting is the quickest, most cost effective way of getting the word out. In addition, since the cell phone has become an adult umbilical cord, it makes perfect sense to send the message right to the smart phone, provided that a member has given the number to the financial institution.

However, these services have run up against a compliance speed trap. The Telephone Consumer Protection Act (TCPA) generally prohibits companies from calling cell phones using an automatic dialer telephone system or artificial pre-recorded voice unless the call is “made with the prior consent of the party called.” See 47 USC 227(b)(1).

The problem is that Congress never defined prior expressed consent. As a result, banks and businesses fear that using pre-recorded voices to notify cell phone users of problems with their accounts may result in class action litigation. They have a point. There has already been litigation in this area and even though I think the courts would ultimately rule that a person who has provided financial institutions with a cell phone number has consented to these notifications, nobody should have to go through litigation to find out.

To resolve this issue, the American Bankers’ Association submitted a petition to the FCC, which enforces the TCPA. In the petition they are asking for the authority to send the following messages using either automated phone calls or text messages to a cell phone:

  • Fraud and Identity Theft Alerts;
  • Data and Security Breach Notices;
  • Money Transfer Notifications and notifications of actions needed to arrange for receipt of pending money transfers; and
  • Messages informing consumers of “steps they can take to prevent or remedy harm caused by data security breaches.”

Presumably, if the bankers’ petition is successful, credit unions would have the same authority. So in reality, this is a win-win. The proposal makes good sense: we should all be able to reach out and touch someone when doing so protects their assets.

December 17, 2014 at 8:42 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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