The Federal Communications Commission (FCC) is expected in the near term to decide the fate of an exemption sought by the Mortgage Bankers Association (MBA) over the Telephone Consumer Protection Act's (TCPA) prior express consent requirement.

The TCPA requires a business to obtain the prior express consent of the called party before making an autodialed, artificial voice, or prerecorded call to a wireless telephone number, unless the call is for emergency purposes or solely for the purpose of collecting a debt owed to or guaranteed by the United States. In June, the MBA filed a petition for exemption with the FCC, seeking an exemption from the "prior express consent" requirement for all autodialed or pre-recorded residential "mortgage servicing" calls made to cellular phone numbers that are not charged to the called party and do not contain an advertisement or constitute telemarketing.

In the petition, the MBA notes that under the TCPA, the FCC is expressly authorized to exempt autodialed or prerecorded calls to wireless numbers when the called party is not charged, subject to certain conditions. The MBA further observes that, although some mortgage servicers will be covered by a TCPA exemption established in the 2015 Bipartisan Budget Act, others are not because the exemption only covers debts (including residential mortgages) that are owed to or guaranteed by the United States. Thus, the requested exemption would expand this exemption to cover all residential mortgage servicers; and clarify any discrepancies between the TCPA and other federal and state laws and regulations requiring mortgage servicers to place outbound telephone calls to borrowers at various times throughout the loan. 

According to the petition, the TCPA has created a compliance problem for the mortgage industry because mortgage servicers must communicate with borrowers to fulfill their obligations under a host of federal and state laws and regulations. As stated in the petition, "[m]ortgage servicing calls are required by federal and state laws, regulations and requirements other than the TCPA;" "these requirements were carefully designed by federal agencies and state legislatures … to effectively communicate important information to residential mortgage borrowers to help borrowers avoid foreclosure and its grave financial consequences." In addition, the Consumer Financial Protection Bureau (CFPB), Department of Housing and Urban Development, and Department of Veterans Affairs, among others, all have promulgated rules or standards requiring early intervention and/or outreach calls designed to benefit borrowers and to inform them of potential loss mitigation options. The TCPA, as currently drafted and interpreted, however, impedes the ability of mortgage servicing companies to place such calls (or to send text messages) to the mobile phone lines of their borrowers—in an effort to comply with the referenced rules and requirements—where no "prior express consent" has been obtained. The Petition defines "mortgage servicing" broadly as "all actions, including communications, related to the receipt and application of payments to the terms of any loan or security agreement, execution of other rights and obligations owed under the loan or security agreement, and any other loss mitigation options." 

In a public notice released on August 3, 2016, the FCC invited interested parties to file comments with respect to the MBA's petition.

Significantly, comments submitted to the FCC during the past two months point to a growing consensus in favor of relaxing TCPA requirements governing "mortgage servicing" calls. For example, on September 2, 2016, the American Financial Services Association sent a letter to the FCC supporting the MBA's petition. Also on September 2, the American Bankers Association submitted comments in support of the request to exempt residential mortgage-related calls from the TCPA's "prior express consent" requirements. On September 19, HOPE NOW Alliance, a nonprofit housing counselor, filed a letter in support of the MBA petition, stating that "HOPE NOW has seen firsthand the importance of having access to telephonic communications in a mortgage crisis." Even the CFPB, in comments filed on May 6, 2016, agreed that the TCPA should be updated to allow latitude for servicing calls: "the Bureau agrees that servicing calls can be beneficial to consumers, so long as those calls are otherwise in compliance with applicable consumer protection laws." 

On October 4, 2016, an ex parte Meeting was held between the MBA, along with other industry representatives, and representatives of the Consumer & Governmental Affairs Bureau of the FCC to discuss MBA's petition. According to our sources, a decision by the FCC is expected "in the near term."