Dynasty Mortgage is an important case for the mortgage industry that should be on the reading list of every mortgage company owner and their compliance team. The case details how a mortgage company employing marketing techniques routinely used in the mortgage industry – such as voice message advertising – found itself facing a potentially business ending fine as a result of making a mere 70 misplaced calls. Dynasty’s defense, which was completely dismissed by the FCC, was in a nutshell: Our lead broker told us we could call them. Nope, not good enough; Dynasty please make your check for $770,000.00 payable to the FCC and mail it to the Forfeiture Collection section in Chicago within 30 days. And – if you’re still in business after paying that sum – the FCC wants you to submit a report supported by an “affidavit or statement under penalty of perjury” detailing how you’ve changed your ways.[2]

While this case will keep a lot of folks in the mortgage industry up at night wondering if their next, its not bad news for the industry in general. Instead, the Dynasty case provides something that has been sorely missing from the world of DNC compliance: clarity. This case sets forth clear unambiguous rules that if complied with will insure that a business will never be subject to a government forfeiture proceeding for failing to comply with the DNC laws. And the case sets forth that first and foremost in avoiding the fate of Dynasty Mortgage is the implementation of a system that documents that none of your outbound calls are in violation of the DNC laws. Documentation is the key: originators will need to be able to show that in addition to having a system in place that checks to insure that the folks they are calling are not on the DNC Registry, that they also have – in writing – a DNC compliance policy and that they’ve trained their employees how to comply with these DNC laws.[3]. And then, if a mortgage company unintentionally calls someone they shouldn’t have, and they can back up this claim of “error” by documented “evidence” of their compliance system, they will fall within the regulatory safe harbor and should not be subject to censure or fine.[4]

The Dynasty case should be a warning to the mortgage industry that backed by a Congressional mandate to clamp down on inappropriate marketing to consumers and with greater funding and resources on the horizon, the FCC and the FTC are going to be heard from a lot. These agencies will not only be calling on the likes of a Dynasty Mortgage, which clearly didn’t get it even after being warned, but also on the likes of average mortgage brokers and bankers who are simply uninformed or lax in their level of DNC compliance. And these agencies, as spelled out in the Dynasty case, will not accept “routine business practices largely consistent” with their regulatory standards.[5] Rather, they want it done right. And they want it done right now.