Wednesday, November 23, 2016

In the Eyes of the FCC Not All Mortgage Servicers are Created Equal

The FCC recently denied a petition by the Mortgage Bankers Association which requested a limited exemption from the prior express consent provision of the TCPA for mortgage servicing calls.  In doing so, the FCC shown a bright spotlight on the difficulties faced by the financial service industry in complying with a series of consumer protection statutes which are either outdated or present a natural  conflict with each other.  Moreover, the FCC reiterated a message it sent out earlier this year:  not all financial service providers are created equal. 

The Petition

In its petition, the Mortgage Bankers Association (“MBA”) requested a limited exemption from the “prior express consumer” requirements of the TCPA for certain non-telemarketing residential mortgage servicing calls to cellular telephone numbers.  In support of its petition, the MBA noted that creating the exemption would insure that the TCPA does not restrict telephone communications requested by other federal and state laws and regulations.  The MBA also aptly noted that the a statutory exemption from the consent requirements for calls made to cellular numbers has been made for those collecting debts owed or guaranteed by the United States – an exemption which would include the many residential mortgages owed or guaranteed by the United States.  In support of its petition, the MBA highlighted the early intervention contacts required by the Mortgage Servicing Rules, as well as other federal and state entities. The MBA requested that a limited exemption be provided for free-to-the-end-user mortgage servicing calls which include “all communications, related to the receipt and application of payments pursuant to the terms of any loan or security agreement, execution of other rights and obligations owed under the loan or security agreement, the modification of any terms of the loan or security agreement, and any other loss mitigation options.”  The MBA further suggested a number of required guidelines for such calls including that they be limited in duration and not including any telemarketing, cross-marketing or solicitation.

The FCC Order Denying the Petition

The FCC denied the petition outright, finding that the MBA has not shown the exempted calls would be free of charge to called parties and that the “public interest in, and the need for the timely delivery of, the calls described by MBA do not justify setting aside the privacy interests of called parties.”  The FCC distinguished the MBA’s requested exemption from those previously provided to certain healthcare and financial calls because the MBA has not established a need for immediate communication. The FCC also found that mortgage servicers have other means to contact customers other than “robocalls.”

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