Financial Services Stakeholders Request TCPA “Emergency Purposes” Exception for COVID-19 Calls

By Ellen T. Berge & Makalia A. Griffith

A group of financial services stakeholders recently submitted a joint petition to the Federal Communications Commission (FCC) for an expedited declaratory ruling, clarification, or waiver so that phone calls and text messages placed to consumers using autodialers and prerecorded voice messages about matters related to the COVID-19 pandemic would not be subject to onerous consent requirements under the Telephone Consumer Protection Act (TCPA).

According to the petitioners, class action litigation risks under the TCPA limit banks and other financial services organizations in the communications they send to consumers, and without confirmation by the FCC that certain COVID-19 calls and texts are subject to the “emergency purposes” exception under the TCPA, financial institutions may not be able to effectively distribute messages about fee waivers, payment deferrals, mortgages, loan modifications, low-rate and zero-rate loans, and other accommodations made in light of the COVID-19 crisis.

The TCPA’s “emergency purposes” exception exempts “calls made necessary in any situation affecting the health and safety of consumers” from the general rule prohibiting companies from placing autodialed, prerecorded, or artificial voice calls and text messages unless the recipient grants permission. The FCC previously, on March 20, confirmed the COVID-19 pandemic qualifies as an emergency under the TCPA.

According to the stakeholders, communications about accommodations made to consumers should fall under the emergency purposes exception because they “are solely informational calls made in good faith to assist consumers and do not include contain advertising or telemarketing or seek to collect payment on a debt.” The stakeholders made clear that the calls are on matters related to the COVID-19 pandemic and are intended to “advise consumers of branch closings, service limitations, reduced hours, or the availability of remote banking and other remote customer service options protect the physical health or safety of consumers and employees, by preventing unnecessary physical contact between consumers and employees.” Additionally, automated dialing would provide customers with timely notifications not otherwise available through manual dialing.

The stakeholders alternatively requested that the FCC provide a temporary exception if the “emergency purposes” exception did not apply.

The petition follows announcements by the Consumer Financial Protection Bureau and the banking regulators urging financial services institutions to work with customers impacted by COVID-19, particularly consumers who cannot make existing loan payments. Additionally, financial institutions aim to quickly communicate with borrowers regarding relevant provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act provides economic relief to impacted consumers and borrowers, including mortgage forbearances for federally insured mortgages and foreclosure prohibitions, establishes requirements for credit furnishers, and creates the “Paycheck Protection Program” (PPP), an emergency lending program administered by the Small Business Administration.

The stakeholders joining the petition are financial services associations including the American Bankers Association (ABA), American Financial Services Association (AFSA), Consumer Bankers Association (CBA), Credit Union National Association (CUNA), Independent Community Bankers of America (ICBA), Mortgage Bankers Association (MBA), and National Association of Federally-Insured Credit Unions (NAFCU).

We will provide updates on this development.