A group of banking trade associations have filed a “Petition for Expedited Declaratory Ruling, Clarification, or Waiver” with the FCC regarding how the Telephone Communication Protection Act’s “emergency purposes” exception applies to phone calls and text messages placed by banks, credit unions, and other financial institutions on matters related to the COVID-19 pandemic.

The TCPA includes an “emergency purposes” exception to its general prohibition on making automated or prerecorded calls to a cellular telephone number without the called party’s prior express consent.  FCC rules define “emergency purposes” to mean “calls made necessary in any situation affecting the health and safety of consumers.”  The FCC has stated that the exception is intended for “instances [that] pose significant risks to public health and safety, and [where] the use of prerecorded message calls could speed the dissemination of information regarding…potentially hazardous conditions to the public.”

In March 2020, on its own motion, the FCC issued a Declaratory Ruing in which it confirmed that the COVID-19 pandemic constitutes an “emergency” under the TCPA and stated that whether a call relating to the pandemic qualifies for the “emergency purposes” exception will depend on the caller’s identity and the call’s content.  With regard to the caller, the caller “must be from a hospital, or be a health care provider, state or local health official, or other government official as well as a person under the express direction of such an organization and acting on its behalf.”  With regard to the call’s content, the content “must be solely informational, made necessary because of the COVID-19 outbreak, and directly related to the imminent health or safety risk arising out of the COVID-19 outbreak.”  The ruling also made clear that the “emergency purposes” exception does not include “calls that contain advertising or telemarketing of services” or “calls made to collect debt, even if such debt arises from related health care treatment.”

In their petition, the trade groups ask the FCC to confirm that calls to cellular phones and text messages made by financial institutions using an automated dialing system or prerecorded or artificial voice about matters related to COVID-19 are calls made for “emergency purposes” and thus may be made without the called party’s consent.  The trade groups assert that the categories of calls they seek to make should fall within the exception because they are intended to protect the financial health or safety of consumers.  These categories are:

  • Calls to offer deferrals, extensions, or other modifications of mortgage or other loan payments
  • Calls and text messages to advise consumers of branch closings, service limitations, reduced hours, or the availability of remote account options
  • Calls and text messages to warn consumers of potential fraud on the consumer’s account

The trade groups note in their petition that in 2015, the FCC granted an exception from the TCPA’s consent requirement for certain time-sensitive messages, including messages concerning suspected fraud.  However, the exception was conditioned on the caller’s use of a wireless number provided by the customer.  The banking groups claim that this condition significantly reduces the value of the exception and that few institutions are using it to make such calls.

A group of consumer groups filed a response to the trade groups’ petition.  While the consumer groups have joined the banking groups in urging the FCC to act expeditiously, they disagree with the banking groups on the scope of the “emergency purposes” exception.  The banking groups urge the FCC not to limit the exception to calls protecting only a consumer’s physical health and safety and instead argue that it should include calls that protect a consumer’s financial health.  The consumer groups urge a narrower reading that limits the exception to calls directly related to health and physical safety.  The calls that they agree would fall within the emergency exception are calls relating to loan modifications or forbearances for payments due on loans secured by homes or vehicles since the loss of either a home or a car puts the consumer and the consumer’s family at greater risk of contracting the coronavirus.

The consumer groups also do not agree that the emergency exception covers fraud alerts.  In their view, the concerns expressed by the banking groups can be addressed by expanding the permissible ways in which institutions can obtain numbers to be called for fraud alerts.  Specifically, it would be reasonable for an institution to use numbers that were supplied by a family member or other cardholder on the account, captured when the consumer called the institution, or contained in records included with accounts purchased from other institutions.  The consumer groups believe that in each of these circumstances, there would be a very high likelihood that the number belongs to the consumer even if the consumer did not directly provide the number to the institution.

Finally, CFPB Director Kraninger sent a letter to the FCC regarding the trade groups’ petition.  In the letter, she stated that allowing financial institutions “to make a limited number of automated calls to their customers alerting them to offers of forbearance; payment deferrals; fee waivers; extension or relaxation of payment terms; loan modifications; and other programs, relief and resources relating to loans secured by homes or vehicles is an important avenue to ensuring that consumers know the various options that may be available to them.”