Student Loan Servicers Petition FCC to Reconsider TCPA Exemption Rules

On January 17, 2017 a notice was published in the Federal Register regarding a Petition asking the Federal Communications Commission (FCC) to reconsider Final Rules adopted in August 2016. The rules in question were adopted to implement an amendment in the Bipartisan Budget Act of 2015 that exempts autodialed calls “made solely to collect a debt owed to or guaranteed by the United States” from the TCPA’s prior express consent requirement. 

A copy of the Federal Register notice can be found here.

The Petition, dated December 16, 2016, was filed on behalf of Nelnet Servicing LLC, Great Lakes Higher Education Corporation, Pennsylvania Higher Education Assistance Agency, and Student Loan Servicing Alliance.

insideARM has written extensively about these rules, most recently on August 12, 2016 when we reported on the final rules. But see also our articles on  July 25, 2016, November 5, 2015 and June 21, 2016.

The rules apply to calls initiated through an automatic telephone dialing system (ATDS) for the purpose of collecting debts owed to the federal government without the consumer’s prior express consent. In summary:

1. The rules limit the number of calls to a cellphone, including text messages, to three per month.
2. The rules also only allow calls concerning debts that are delinquent or at imminent risk of delinquency, unless there is prior express consent otherwise.
3. The rules require that, absent consent, callers only call the individual who owes the debt, not his or her family or friends.
4. The rules limit the number of calls allowed to reassigned numbers, consistent with the July, 10, 2015 TCPA Omnibus Declaratory Ruling and Order.
5. The rules reiterate that consumers have the right to stop calls they do not want at any point they wish, and require callers to inform consumers of that right.
6. The rules apply to each caller, rather than each debt.  Otherwise, consumers who have multiple loans with a single owner of the debt, as many do, could be receiving an excessive number of calls per month to their cell phones.  This limitation prevents that from occurring.
7. The rules limit the time of day when calls can take place, requiring that no calls can be made before 8 a.m. and after 9 p.m. local time at the called party’s location.

The Petition for Reconsideration generally argues:

1. That the Rules are not supported by the text of the statute or the record and are contrary to the Congress’s intent; and,
2. The FCC’s interpretation of its Rulemaking Authority is impermissibly broad.

Among more specific arguments, the Petitioners suggest that the three-call attempt-per-thirty-day limit lacks any rational basis and will stymie borrower contact. Petitioners further claim that the limit does not and did not flow from the congressional record.  They highlight that commenters, including federal agencies and federal loan servicers, demonstrated with extensive filings why more calls are needed to effectuate Congress’s intent.

The Petition also argues that any limits on the number of exempt calls should be based on the number of live conversations rather than call attempts. Additionally, the Petitioners argue that the Commission erred in limiting the exemption to “calls to the debtor, as calls to reassigned and wrong numbers must be allowed to give meaning to Congress’s exemption.” 

Finally, the Petitioners suggest another alternative – that the FCC modify the rules specifically for Federal Student Loan Servicers. They argue that the loan servicers have special needs for contacting student loan holders.

Oppositions to the Petition must be filed on or before February 1, 2017. Replies to an opposition must be filed on or before February 13, 2017.

insideARM Perspective

Recent developments at the FCC might increase the likelihood for a positive response to this Petition. On December 15, 2016 former FCC Chairman Thomas Wheeler, the primary architect of these rules, announced his retirement. Additionally, just yesterday, President Trump named current FCC Commissioner Ajit Pai as the new Chairman of the FCC.

We suggested in our article yesterday that Mr. Pai, as Chairman, may lead the FCC to reverse course on rules generally governing the TCPA. A positive response to this petition on these particular rules regarding calls on government debt would certainly be a step in that direction.

In another article today on insideARM, we highlight a letter sent yesterday to Commissioner Pai from the Natioal Association of Federally-Insured Credit Unions (NAFCU), also urging him to re-evaluate TCPA rules.