On November 2, President Obama signed a two-year budget deal recently passed by Congress, which generated considerable press because it averted legislative battles over the debt limit and a potential government shutdown, at least until 2017. Much less attention was paid to other provisions within the legislation, which includes a modification of the Telephone Consumer Protection Act of 1991 (“TCPA”).
The TCPA generally prohibits calls made and text messages sent using an automatic telephone dialing system (“ATDS”) to wireless telephone numbers, or calls utilizing artificial or prerecorded voices to any telephone line, without the prior express consent of the called party. The budget bill amended the TCPA to allow the use of an ATDS and prerecorded messages for calls and text messages “made solely to collect a debt owed to or guaranteed by the United States.”
Debts that fall under this description include federally-backed student loans, mortgages, and taxes. In a report to the White House in October 2015, the Department of Education wrote, “Many student loan borrowers, especially those that may just be graduating, move frequently in addition to no longer having landline phone numbers. It can be difficult for servicers to find a borrower except by using a cell phone number.”
Others have expressed concern that the exemption will allow for harassment of debtors and higher cell phone bills. The change, however, is not a blanket authorization for servicers of federally-backed loans to repeatedly contact their debtors. The Federal Communications Commission is responsible for implementing the revised statute within nine months of the bill’s enactment, and was also given the ability “to restrict or limit the number and duration of calls” made to wireless telephone numbers utilizing the new exception. Holders of government-backed debt should be aware of this new exception, and stay tuned for relevant guidelines from the FCC in 2016.
Troutman Sanders LLP has unique industry-leading expertise with the TCPA, with experience gained trying TCPA cases to verdict and advising Fortune 50 companies regarding their compliance strategy. We will continue to monitor legislative changes and regulatory implementation of the TCPA in order to identify and advise on potential risks.