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Insights From Capitol Hill: What’s Next for the TCPA and CFPB

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November 12, 2018
By: LiveVox
Topics: CFPB , Compliance , TCPA

The following is a summary of the opinions and observations of Mark Mallah, General Counsel, LiveVox Inc.; Joann Needleman, Attorney, Clark Hill PLLC; and Ryan Thurman, Director of Sales, Contact Center Compliance. Together they discussed what’s next for the TCPA and CFPB in regards to changes in leadership on Capitol Hill. The full webinar can be found here.

Earlier this year, Mick Mulvaney, Acting Director of the Bureau of Consumer Financial Protection (BCFP), spoke at the Washington Insights Conference and laid out his vision of the regulatory environment. LiveVox’s own General Counsel was there and these are some of the takeaways that may help guide your business forward in the next twelve to 24 months.

But first some housekeeping: The views expressed in this blog do not constitute legal advice. We urge businesses to consult with their own experienced legal counsel to independently review the topics covered here and independently evaluate any compliance measures they undertake.

What’s in a Name?

As we all know, the Consumer Financial Protection Bureau (CFPB) came to life in 2010 and radically changed the regulatory environment for financial institutions. Almost overnight the industry was saddled with completely new compliance requirements, rules and regulations, and audits. The duties and responsibilities of the CFPB were defined by its director and a culture of “regulation by enforcement” was established.

This massive and swift regulatory shift created much confusion regarding what was considered compliant and quickly resulted in multi-million dollar class-action lawsuits. As a result, businesses in highly regulated industries, such as ARM,  were forced to shift their primary focus from performance to risk management.

Nearly eight years later, confusion and risk aversion remain significant driving factors.

With the arrival of a new acting director on November 24th, 2017, the industry is seeing a change once again. In fact, as symbolic of the direction and purpose of the Bureau, the name of the organization literally changed from the CFPB to the BCFP (Bureau of Consumer Financial Protection), hewing to the name outlined in its charter.

Now lead by Mick Mulvaney, the new tone and priorities of the Bureau are starting to become clear. First and foremost, the philosophy of the Bureau is set to shift. The BCFP appears to be more understanding of business concerns than the CFPB.   Mr. Mulvaney’s background demonstrates a closer understanding of the role of businesses like ARM and a willingness to engage with business leaders to reach a more practical and statutorily faithful interpretation of regulatory requirements. This appears to be a positive shift for the industry.

For those who have made significant investments in technology and processes to adjust to a more strict adherence to the literal senses of the law, those investments appear to better position businesses moving forward. 

What is the BCFP About?

Even though the regime has only been in existence for a relatively short period of time, two major trends are starting to emerge – the good, and potentially bad:

  • Law enforcement will continue but with greater focus on bad actors: The Bureau will continue to pursue and enforce violations. However under Mulvaney, the focus of the BCFP will be on the worst actors. Prior to this change, many viewed the Bureau’s action as wide reaching with the intent to force behavioral change, even if the old behavior did not violate any particular regulation. This is good for the industry as it may relieve some unnecessary pressure on businesses who do operate within the law.

 

  • Greater power to states: The second trend is the Bureau’s shift of enforcement power to state attorneys. Mr. Mulvaney has stated that he believes local state attorneys have a better understanding of the issues faced by consumers and businesses in their respective states and should therefore be given the opportunity to enforce violations as they see fit. This however may increase industry confusion as states may vary in their rulings. For companies that operate across multiple states and service customers across multiple states it may in fact create more complexity, therefore increasing risk.

Developments for the TCPA

Like the positive and potentially negative impacts of the Bureau’s shift, the same cautionary approach should be taken for those attempting to stay within the confines of the TCPA. In March 2018, the D.C. Circuit issued a ruling in ACA International v. FCC, which made strides in removing some of the most challenging elements of FCC TCPA interpretation, including the potential capacity standard. However, the ruling did not alter other fundamental issues such as consent revocation.

In addition, TCPA-related developments are occurring in state assemblies, courthouses, and courts of appeal up and down the country. With such activity, it appears as if the calm before the storm.  With fallout from the midterm elections and a growing body of conflicting TCPA jurisprudence, there are various bills being proposed that could impact contact centers and necessitate adjustments.

This has left many industry leaders unsure of  what is going to happen next. Unfortunately, the only clear answer is that there is no sure answer – therefore, taking your eye off compliance would not be recommended.

In fact, since the March 2018 ruling, ACA International v. FCC, stated Ryan Thurman from Contact Center Compliance, there has been a rise in the number of cases filed under the TCPA. On average there are 80 cases a week being filed, as opposed to 60 per week before the ruling. We want to draw your attention to this because we can all be vulnerable to what we call litigation sharks. These are individuals who make their living by suing businesses under the TCPA. They are becoming more sophisticated with apps and blogs encouraging others to sue or join their suits. They are filing cookie-cutter cases that can cost companies between tens and hundreds of thousands of dollars. The regulatory disruption we are seeing is emboldening these bad actors and spurring their efforts to take advantage of the uncertain times we are working in.

But, there may be a silver lining in this. The continuation of predatory litigation may not go unnoticed under the new business-friendlier regulatory environment. There may be an opportunity for the industry to shed greater light on such activities and enlist legislation to minimize the impact of such actors.

So What Can You Do?

In the webinar Joann Needleman strongly suggests that now is the time to educate those who govern us. She says that legislators, the FCC, and Attorneys General are hearing a lot of stories from consumers and acting upon them. She reminds us that we have a voice too and the FCC is open to anyone to talk to. Joann recommends we think about our issues and present them with simple arguments that can help sway the discussion. Attorneys General care about their constituents, and we should make sure they know that our business is a constituent too and what they decide can have a real impact on the states in which we operate.

It is fundamental to navigating through the shifting regulatory environment to understand that the law is a process. Wherever the industry is today, it is not going to be in the same place tomorrow. It would be wise to keep a very close eye on the changes that directly affect contact center operations and always remember that risk mitigation and risk management is an art, not a science. With better intelligence and a better working knowledge of the regulations, you can practice this art more effectively. This environment does not allow for perfect compliance and finding a balance between your business goals and risk is an invaluable skill.

And finally, despite a more business friendly environment, the investments, processes and protocols that have been developed should not be dismissed. Political leadership can and will change again – and faster than ever as the mid-term elections may once again shift the direction of power, which in turn, will change the regulatory environment. Maintaining a risk-sensitive and proactive stance on compliance will remain key.

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