On August 11, 2016, the Federal Communications Commission (FCC) announced new rules that impose limitations on private collection agencies and servicers seeking to collect on behalf of federal debts, such as some mortgages and student loans. Congress assigned the FCC with implementing these rules after passing Section 301(b) of the Bipartisan Budget Act of 2015, which permitted an exception to the Telephone Consumer Protection Act (TCPA) for calls and text messages “made solely to collect a debt owed to or guaranteed by the United States.” Indeed, the Act amended the TCPA to allow such communications “made solely to collect a debt owed to or guaranteed by the United States.”
Under the new FCC rules:
- Debt collectors may place three calls or texts per month to people with loans “owed to or guaranteed by the United States.”
- The new limitation applies regardless of how many separate accounts a single borrower has with the caller.
- Only consumers at risk of delinquency may be called.
- The caller also must inform the borrower that he or she has the right to stop calls at any point.
- There are new restrictions around contacting the borrower’s family or friends.
- The new regulations continue the “one-call window” for reassigned numbers.
The FCC also clarified that a borrower’s do-not-call instruction remains in place even if an account is transferred to a new servicer. The new regulations are expected to take effect 60 days from August 11, contingent upon approval by the Office of Management and Budget.
Congress’ passage of the Bipartisan Budget Act of 2015 seemed like a window of relief for institutions servicing federally-backed loans. However, the FCC’s new rules are severely limiting and only serve as a new hurdle for institutions that service federally-backed loans.