CUNA Comment Letter

NCUA Examination Survey

OMB Control Number: 3060-0519 - Rules and Regulations Implementing the Telephone Consumer Protection Act

September 3, 2003

John D. Graham
Office of Information and Regulatory Affairs
Office of Management and Budget
725 17th Street, NW
Washington, DC 20503

Dear Mr. Graham:

We are writing to request that the Office of Management and Budget (“OMB”) deny approval under the Paperwork Reduction Act (“PRA”) for information collections required by new Federal Communications Commission (“FCC”) rules promulgated under the Telephone Consumer Protection Act concerning unsolicited advertising faxes. The Credit Union National Association (CUNA) represents more than 90% of our nation’s federal and state-chartered credit unions.

The FCC has grossly underestimated the number of U.S. businesses, including trade associations, such as CUNA, as well as our member credit unions, that will be burdened with new recordkeeping requirements, as well as the hours and costs involved in keeping such records. The FCC also failed to provide OMB adequate notice of the radical increase in information collections required under the new fax rules. Therefore, CUNA respectfully requests OMB not to approve information collections required by the FCC’s new fax rules.

The FCC recently revised its rules restricting unsolicited advertising faxes, requiring a business to obtain the prior, written, signed consent of fax recipients, as well as the disclosure of a fax number by the recipient, before that business may send a fax. See revised 47 C.F.R. § 64.1200(a)(3). The FCC also eliminated the established business relationship (“EBR”) exception, meaning that a business may not send faxes with any advertising content to their own customers — even in response to a customer’s request — without first obtaining written, signed permission. This includes communications between trade associations and their members. CUNA relies heavily on fax communications with their member credit unions to provide them with the information and services that they have already expressed an interest in receiving when they made the decision to become members of CUNA. This also impacts those credit unions that choose to fax information on products and services to members that have indicated an interest in receiving such information when they made the decision to become a member of the credit union.

These requirements represent a staggering new paperwork burden on nearly all U.S. businesses, including trade associations, such as CUNA, as well as those credit unions that also communicate by fax. Although the FCC has extended the deadline when these rules will go into effect to January 1, 2005, these new information collections presently are before OMB for PRA consideration.

Even prior to the January 1, 2005 deadline, however, the FCC would inflict substantial, new paperwork burdens on U.S. businesses of all sizes by imposing time limits on the EBR exception. Under the FCC’s revised definition of the EBR exception now before the OMB, businesses may not send faxes containing advertising material starting eighteen months after a customer’s last transaction with the business or three months after the customer’s last inquiry. See revised 47 C.F.R. § 64.1200(f)(3). This will require every U.S. business that sends faxes with advertising content to keep detailed, continuously updated records of their customers’ last inquiries and transactions.

The FCC’s estimate of the new burden on businesses is extremely low. In its submission to OMB, the FCC concludes that because “companies that advertised via fax already maintained customer lists with fax numbers,” the “additional recordkeeping burden of obtaining a recipient’s written permission, including their signature, will be minimal.” On the contrary, the FCC’s rules necessitate extensive information collection campaigns that will be inefficient and expensive.

For example, CUNA, as well as any credit union affected by this rule, will have to expend a significant and unexpected amount of administrative expense to obtain the necessary consents. CUNA and credit unions are not-for-profit organizations that operate with substantial budget constraints. These unexpected costs will be devastating and will place such organizations in a very precarious economic condition.

CUNA believes that the new information collection will require orders of magnitude more time than the one hour per year per business estimated by the FCC (i.e., thirty minutes to obtain all necessary prior, written, signed consents and thirty minutes to update continuously records concerning customers’ last transactions and inquiries). The number of businesses that fax advertising content is also substantially greater than the FCC’s estimate of 20,000 businesses, which appears to be based only on the number of U.S. firms that engage in telemarketing — not the far greater number that send faxes. Trade associations, such as CUNA, and credit unions appear to be examples of organizations that the FCC may have neglected to consider. The bottom line is that OMB should summarily reject the FCC’s annual cost estimate across the U.S. economy of $195,000 due to the new consent requirements and $146,250 due to the new EBR exception.

The FCC also failed to give OMB adequate notice of these radical changes. A single paragraph in the FCC’s Notice of Proposed Rulemaking of October 2002 sought OMB’s comment on the FCC’s “determination that a prior business relationship…establishes the requisite consent to receive telephone facsimile advertisement transmissions.” It was not suggested or revealed in any way that the FCC was contemplating making a dramatic change to its existing information collections. Therefore, as we read the OMB rules, OMB should additionally determine that the FCC “substantially modified the collection of information obtained in the final rule from that in the proposed rule without providing OMB with notice of the change” at least 60 days before the publication of the final rule. 5 C.F.R. § 1320.11(h)(2). The FCC published the final rules concerning faxes on July 3, 2003.

CUNA urges OMB to disapprove the information collections called for under the FCC’s revised fax rules. Please feel free to contact me should you desire any additional information about how these burdens will affect CUNA and its members. Thank you for your consideration.


Jeffrey Bloch
Assistant General Counsel

CC: Ms. Kim A. Johnson
Mr. Leslie Smith