Consumers suffer when credit unions are forced to curtail communications with member-owners, as they cannot receive the information they need, CUNA wrote to the leadership of a House Judiciary subcommittee Tuesday. The letter was sent to the House Judiciary subcommittee on the Constitution and civil justice, which conducted a hearing on lawsuit abuse and the Telephone Consumer Protection Act (TCPA).

“Credit unions … may be more likely to settle litigation even if they did not purposefully violate the TCPA. In other words, the cost of defending a TCPA lawsuit coupled with the risk of crippling mandatory damage awards may be too great for many credit unions to bear, causing them to settle meritless suits,” the letter reads. “Not only does the risk of TCPA liability cause credit unions to settle meritless lawsuits, it also causes credit unions to stop certain important informational communications to consumers, and that hurts members.”

The letter notes that, with no cap on statutory damages, a credit union of any size defending a lawsuit for a technical violation of the TCPA could face a substantial resource burden, which ultimately falls on the credit union’s member-owners.

 

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