The Federal Communications Commission has denied the Mortgage Bankers Association's request for exemption from part of the Telephone Consumer Protection Act requiring servicers to get consent before robo-calling mobile phones.
"We find that MBA has not shown, as a threshold matter, the exempted calls would be free of charge to called parties," the commission said in an order Tuesday.
"Separately, we find that MBA has not shown that it should be able to make or send non-time-sensitive robo-calls, including robo-texts, to consumers without first obtaining consumer consent," the FCC added. An enforcement advisory Friday indicated the FCC will particularly crack down on "unwanted robo-texts."
The decision can be appealed, according to the FCC. The MBA is evaluating its options, according to Pete Mills, senior vice president of residential policy and member services.
"We are surprised [by the] procedure the FCC utilized to deny our petition, because they had not used it previously," he said.
Consumer advocates were pleased with the order.
"We had a win, which is pretty unusual this month," said attorney Margot Saunders, who works with the National Consumer Law Center.
The Federal Housing Finance Agency also has asked the Federal Communications Commission to carve out an exemption for the mortgage industry.
An exemption exists for government-backed debt. The FHFA is the regulator and conservator of Fannie Mae and Freddie Mac, which aren't strictly governmental, but rather government-sponsored.
By denying the MBA's petition, the FCC is basically rejecting a similar argument made by the FHFA — that prohibiting robo calls impedes other government directives for servicers to make contact with borrowers who have trouble paying their loans.
"It has put servicers in a really difficult position," said Barry Hays, senior vice president of TeleVoice, a provider of interactive voice response technology that servicers use to handle inbound calls and record consumer consent.
Also, banks have been getting hit with lawsuits over robo calling that have resulted in big payouts.
A particular concern for mortgage servicers is that the automated calls to mobile phones prohibited by the TCPA without consent includes both prerecorded calls, as well as auto-dialers that connect live callers to borrowers, he said.
It's unclear how successful an effort to appeal by the MBA would be.
"I'm skeptical of MBA's ability to succeed on appeal," said Hays.
However, the Republican-controlled Congress is likely to be open to amendments that could address the industry concern. Whoever the new Trump administration appoints as FCC chair also could be in favor of a different interpretation. One possibility is senior Republican FCC Commissioner Ajit Pai.
"Certainly a lot of the campaign rhetoric has indicated that the new administration is in favor of reducing the regulatory burden to the private sector," said Hays.