The Consumer Financial Protection Bureau (CFPB) has recently faced significant changes, leading to a lot of speculation about the future of compliance in consumer communications. Some believe that with the CFPB’s restructuring, and deprioritizing of its enforcement actions, compliance standards may become less strict. However, this assumption couldn’t be further from the truth.
Let’s break down some common myths and uncover the facts about compliance moving forward.
Myth: “The CFPB has been completely dismantled.”
Fact: While the CFPB is undergoing significant restructuring of its operations, a mass layoff has yet to take place. In fact, a federal judge has blocked the plan to lay off 90% of CFPB staff, pending a review to determine if the layoffs violate existing court orders. Recent developments from the April 28th follow-up hearing reveal that a U.S. appeals court has reinstated a temporary ban on mass firings at the CFPB, allowing workers to retain their jobs for now. With the CFPB’s workforce still intact, consumers should expect ongoing enforcement of consumer protection laws.
With its reduction in workforce plans paused, on May 12th, the CFPB withdrew 67 pieces of prior guidance in line with plans outlined in an internal note issued April 16 by the CFPB’s Chief Legal Officer, Mark Paoletta. The CFPB plans to shift resources away from enforcement that can be handled by the states and focus on fraud causing identifiable victims and measurable damages. The CFPB intends to emphasize direct redress rather than imposing penalties. “The Bureau is committed to issuing guidance only where that guidance is necessary and would reduce compliance burdens rather than increase them. Historically, the Bureau has released guidance without adequate regard for whether it would increase or decrease compliance burdens and costs. Our policy has changed,” CFPB Acting Director Russ Vought wrote Monday. The withdrawn guidance materials include those listed in Section III, Federal Register :: Interpretive Rules, Policy Statements, and Advisory Opinions; Withdrawal.
Myth: “The CFPB is the only agency that enforces consumer communication laws, so if it steps back, other agencies won’t take action.”
Fact: While the CFPB has played a prominent role in enforcing consumer protection regulations, it is not the only entity overseeing messaging compliance. Other regulatory bodies, like the FCC/TCPA and the mobile carriers, have long been responsible for enforcing standards in communications. Message senders should make sure they send messages in compliance with the FCC and TCPA, as well as the Carrier’s Codes of Conduct and the CTIA.
The TCPA governs text messaging primarily to protect consumers from unwanted messages. The FCC implements the TCPA through its rules and regulations. TCPA cases related to text messaging violations are common. The TCPA prevents unconsented calls made to cell phones using an ATDS or an artificial or pre-recorded voice. Businesses must ensure they have consent to text before using an ATDS. Violations can lead to fines ranging from $500 to $1500 per message, depending upon severity and intent. The frequency of TCPA cases has increased over the years. Many lawsuits arise from businesses failing to get proper consent from consumers to message them. Even if you’re not using an ATDS to send messages, businesses should follow TCPA consent requirements to minimize risk and ensure compliance with applicable wireless carrier requirements and best practices.
Mobile network operator (“carrier”) policies also remain firmly in place. Carrier policies are being enforced even more stringently with initiatives such as a new centralized Brand registration and vetting system for short codes, required registration for 10DLCs, and a renewed focus on auditing messaging traffic to ensure compliance with carrier Codes of Conduct and CTIA Monitoring standards. Not following these policies will lead to audit failures, loss of communication codes, and potential carrier fines.
Myth: “The CFPB’s restructuring means the industry will have more flexibility in compliance enforcement.”
Fact: Messaging compliance remains as important as ever, and any assumption that it will become more lenient is a mistake. Whether or not the CFPB is fully operational, the FCC (enforcing the TCPA) and the mobile carriers continue to enforce very strict standards. Ignoring these requirements can put your business at risk. Ensuring proper consent is obtained, sending compliant communications and adhering to messaging best practices are crucial steps to keeping your operations compliant and safeguarding your organization from civil litigation and/or having your Code blocked by the carriers.
Why Compliance Is Non-Negotiable
- TCPA: Protecting Consumers
The TCPA is crucial in protecting consumers from unsolicited messages. It sets clear rules on consent, opt-out procedures, and message content. Following these rules is non-negotiable if you want to protect your customers’ privacy and your business from penalties. - FCC: Upholding Messaging Standards
The FCC interprets and enforces TCPA regulations, ensuring consistent adherence across communication channels. - Carrier Policies: Stricter Than Ever
Major mobile carriers have their own codes of conduct, often stricter than federal regulations. Complying with these carrier-specific rules is vital for acquiring a communication code, continued message deliverability and maintaining a positive sender reputation.
It’s crucial for businesses to recognize that compliance is not a static requirement, it’s an ongoing commitment. Even with fluctuating responsibilities within regulatory bodies, the fundamental need for compliant, transparent communication remains unchanged.
As we await further clarity on the CFPB’s future, adhering to existing compliance guidelines remains a business-critical priority; regardless of what shifts may come.
We’re Here to Help
At Solutions by Text, we’re dedicated to helping you navigate the complexities of compliance in your messaging strategy. From meeting legal requirements to ensuring effective opt-in and opt-out processes, we work alongside you to maintain the highest standards. Our team is committed to ensuring that your texting program remains compliant at every step, allowing you to focus on what matters most – engaging your customers.
