Loan servicers face mounting pressure from borrowers, regulators, and business partners to manage federal communication requirements effectively. The Telephone Consumer Protection Act (TCPA) sits at the center of this operational challenge, creating serious financial and legal risks for companies that get it wrong. TCPA violations can result in substantial penalties per violation, with the potential for treble damages in cases of willful conduct.

The stakes continue rising as TCPA lawsuits increase significantly each year, with class action filings representing the majority of cases. This guide walks loan servicers through the essential TCPA requirements, common violations to avoid, and how the top features of a loan management system like Nortridge help manage these requirements while streamlining borrower communications.

Key Provisions of TCPA for Loan Servicers

The TCPA establishes strict rules for how businesses can contact consumers using automated systems, prerecorded messages, and text communications. 

Prior Express Written Consent Requirements

Loan servicers must obtain clear, documented consent before making auto-dialed calls or sending automated text messages to cell phones. Prior express consent requirements include:

• Written documentation for all automated calls to cellular phones
• Clear disclosure explaining the nature of communications borrowers will receive
• Entity identification specifying who will be making the calls
• Contact information for borrower questions about communications
• Specific permissions for each type of automated contact method

Valid consent goes beyond verbal agreements and must clearly explain what types of communications the borrower can expect to receive.

Autodialer and Prerecorded Message Rules

The TCPA defines automatic telephone dialing systems (ATDS) as equipment that can store or produce telephone numbers using random or sequential number generators. Key autodialer requirements include:

• Opt-out mechanisms for all auto-dialed or prerecorded calls to residential lines
• Technology tracking to identify which communications use automated systems
• Consent verification before each automated communication
• Equipment definitions that include systems with the capacity for automated dialing
• Message identification requirements for all prerecorded communications

For loan servicing activities, your system must track which communications use automated technology and ensure proper consent exists for each contact method.

Calling Time Restrictions and Do-Not-Call Requirements

Federal regulations establish specific limitations on when and how loan servicers can contact borrowers:

• Time restrictions limiting calls to permissible hours in the borrower’s time zone
• National Do-Not-Call registry compliance for marketing-related communications
• Internal do-not-call lists are maintained and updated promptly
• Opt-out processing completed within 10 business days under current FCC rules
• Business relationship exemptions for certain loan servicing communications

Each loan servicer must honor these requirements while maintaining effective borrower communications for legitimate servicing purposes.

Explore Nortridge’s configurable workflows for managing borrower communication preferences.

TCPA Best Practices for Loan Servicers

Successful TCPA management requires systematic processes, accurate record-keeping, and robust technology tools. These proven practices help loan servicers avoid violations while maintaining effective borrower relationships:

• Implement robust consent management with detailed processes for capturing, storing, and tracking borrower consent across all communication channels
• Maintain accurate communication records that track every borrower interaction including purpose, method, and outcome with four-year retention for statute of limitations protection
• Train staff regularly on current TCPA requirements with quarterly updates covering consent requirements, automated system usage, and regulatory changes
• Review policies systematically through scheduled assessments that incorporate new regulations and court decisions affecting TCPA interpretation
• Leverage technology tools with loan management systems that include built-in features for managing TCPA requirements and reducing manual oversight

Together, these practices help reduce TCPA risk while improving borrower communication and operational control. Addressing TCPA requirements is just one part of overcoming common loan servicing challenges that modern servicers face in today’s regulatory environment.

See how Nortridge simplifies TCPA compliance with its robust reporting and auditing tools.

Top TCPA Violations in Loan Servicing and How to Prevent Them

Loan servicers should be able to identify compliance risks before they become costly problems. These frequent violations show where even experienced servicers can face challenges.

Calling Without Proper Consent

Many TCPA violations occur when loan servicers contact borrowers without valid consent or after consent has been revoked. This includes calls to cell phones using automated dialing systems without written permission. Proper consent management ties directly to fundamental credit principles that establish trust between servicers and borrowers.

Prevention Strategy: Implement consent verification checks before initiating any automated communications. Your system should flag contacts lacking proper consent and route them for manual review.

Improper Use of Automated Dialing Systems

The 2019 TRACED Act limits debt collectors to 3 auto-dialed or prerecorded calls per consumer overall, even for different debts. Exceeding these limits creates immediate TCPA liability.

Prevention Strategy: Configure your dialing systems to track call counts per borrower across all loan accounts. Automated controls prevent accidental violations when borrowers have multiple loans.

Ignoring Do-Not-Call Requests

Failing to honor borrower requests to stop receiving calls represents a serious TCPA violation. This includes not updating internal do-not-call lists and continuing automated communications after revocation.

Prevention Strategy: Establish immediate opt-out procedures that update all communication systems in real-time. Under new FCC rules, you may send one confirmation text within five minutes to clarify the scope of opt-out requests.

Calling Outside Permissible Hours

TCPA regulations restrict calling times to protect consumer privacy. Violations occur when automated systems place calls too early or too late in the borrower’s time zone.

Prevention Strategy: Program time zone restrictions into your communication systems. Account for borrower location data and seasonal time changes when scheduling automated contacts.

Discover how Nortridge can help you automate communication workflows and reduce compliance risks.

Managing TCPA Requirements with Nortridge Loan System

Nortridge provides loan servicers with comprehensive tools for managing TCPA compliance while streamlining borrower communications. These integrated features reduce manual tasks and minimize violation risks:

• Automated communication controls through workflow engines that configure   complex communication rules based on TCPA requirements, including calling hours, and opt-out processing
• Comprehensive audit trails for every communication with detailed records, including timestamps, user information, and borrower responses, providing evidence for compliance demonstrations

The Nortridge platform integrates these features seamlessly with loan servicing operations, ensuring TCPA requirements become part of standard workflow processes rather than additional administrative burdens.

Schedule a demo to see how Nortridge can streamline your loan servicing operations while managing TCPA requirements.

Prioritizing TCPA Compliance for Long-Term Success

TCPA compliance represents a fundamental requirement for modern loan servicing operations. The Nortridge Loan System provides the configurable tools and automated controls loan servicers need to maintain TCPA compliance while delivering effective borrower communications. 

Ready to manage TCPA requirements with confidence? Schedule a demo and see how Nortridge can support your loan servicing strategy.