WASHINGTON—Credit unions suffer unequal treatment for having made important and welcome calls to members under the Telephone Consumer Protection Act (TCPA), CUNA said in an amicus brief filed in Lindenbaum v. Realgy, LLC.
Separately, CUNA told the Senate the member business lending cap is “arbitrary” and hurting small businesses.
In its court brief, CUNA called on the U.S. Sixth Circuit Court of Appeals to affirm the U.S. District Court for the Northern District of Ohio’s dismissal of the TCPA lawsuit in light of the Supreme Court’s decision in Barr v. American Association of Political Consultants, Inc. in July 2020.
In that case the Supreme Court found a 2015 amendment to the TCPA was unconstitutional and eliminated the addition going forward. However, credit union calls made between the 2015 amendment and the 2020 decision were still subject to unequal treatment under the TCPA during that time, CUNA noted.
“Credit unions communicate with their members on a wide range of matters such as financial relief during times of emergency, information enabling participation in governance, financial education, status of loan payments, and fraud alerts. Members expect and welcome these informational communications,” stated CUNA in its brief. “But under Plaintiff’s interpretation of the TCPA, a credit union that makes calls to collect private loans would face potentially crippling liability, whereas a company that calls to collect federally guaranteed loans would be exempt—a classic case of unequal treatment.”
‘Ubiquitous & Costly’
The brief goes on to note that, despite good-faith compliance efforts, credit unions limit important communication to members because of “ubiquitous and costly” TCPA litigation. CUNA’s research also shows there is no questions the TCPA chills credit unions’ communications with their members.
“More than three-fourths (76%) of credit unions responding to a CUNA survey reported that it is ‘very difficult’ (30%) or ‘somewhat difficult’ (46%) to determine whether their communications are compliant with the TCPA,” the brief reads. “The same survey found that 35% of credit unions curtailed or stopped texting their members… As a result, important notifications are delayed or not made at all. Instead of being protected, consumers are being harmed by not timely receiving notifications—such as debt payment relief options following natural disasters or late payment notices.”
CUNA filed a similar brief with the U.S. Supreme Court last year in Facebook Inc., v. Duguid, urging the court to restore an appropriate balance between protecting consumers and not unduly burdening credit unions’ ability to communicate with their members.
‘Arbitrary’ MBL Cap
Separately, CUNA said in in a letter to the leadership of the Senate Committees on Small Business and Banking, Housing, and Urban Affairs that the “arbitrary” member business lending cap is an obstacle keeping needed funds from small businesses.
The letter was sent as both committees conducted hearings on coronavirus relief legislation.
“Looking forward, beyond PPP, small businesses across the country will continue to be in need of funds and credit unions are in a position to pump billions of capital into the economy,” CUNA wrote to the committees.
CUNA notes that credit union business lending has increased greatly since the Great Recession, leading to many credit unions being at or near the 12.25% cap.
“We conservatively estimate that even temporarily removing the member business loan (MBL) cap will provide over $5.5 billion in capital to small and informal business ventures, creating nearly 50,000 jobs just over the course of the next year,” the letters read.
CUNA also added that Small Business Administration research shows that the majority of credit union business lending is lending that would not otherwise be made by banks or other entities.