IBA Compliance Connection

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We would like our mortgage loan originators to send out an email reminders to mortgage loan customers with the details of their upcoming closing, such as the time and place. The subject line of the email would be “Your Closing.” The email would contain one line near the end asking the borrower to refer anyone they know looking for a mortgage to our bank. Does this email need to comply with the CAN-SPAM rules?

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No, we do not believe the email needs to comply with the CAN-SPAM rules, as the email’s “primary purpose” does not seem to be “commercial.”

The CAN-SPAM Act applies only to commercial emails, defined as “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service.” The term does not include a “transactional or relationship message” which, among other things, means “an electronic mail message the primary purpose of which is . . . to facilitate, complete, or confirm a commercial transaction that the recipient has previously agreed to enter into with the sender.”

We believe the portion of your email containing details related to your closing would be transactional or relationship content and the request for referrals would be a commercial advertisement or promotion of a commercial product or service. When an email contains both kinds of content, whether the email will be deemed commercial depends on whether: (1) a “recipient reasonably interpreting the subject line of the electronic mail message would likely conclude that the message contains the commercial advertisement or promotion of a commercial product or service,” or (2) the “electronic mail message’s transactional or relationship content . . . does not appear, in whole or in substantial part, at the beginning of the body of the message.”

Since the subject line of your email is “Your Closing,” and the request for referrals comes at the end of the email, we do not believe the “primary purpose” of the email would be considered commercial. Consequently, we do not believe your email needs to comply with the CAN-SPAM rules.

For resources related to our guidance, please see:

  • CAN-SPAM Act, 15 USC 7702(2)(A) (“The term ‘commercial electronic mail message’ means any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service (including content on an Internet website operated for a commercial purpose).”)
  • CAN-SPAM Act, 15 USC 7702(2)(B) (“The term ‘commercial electronic mail message’ does not include a transactional or relationship message.”)
  • CAN-SPAM Act, 15 USC 7702(17)(A) (“The term ‘transactional or relationship message’ means an electronic mail message the primary purpose of which is—

(i) to facilitate, complete, or confirm a commercial transaction that the recipient has previously agreed to enter into with the sender.”)

  • CAN-SPAM Act Regulations, 16 CFR 316.3(a) (“In applying the term ‘commercial electronic mail message’ defined in the CAN-SPAM Act, 15 U.S.C. 7702(2), the ‘primary purpose’ of an electronic mail message shall be deemed to be commercial based on the criteria in paragraphs (a)(1) through (3) and (b) of this section: . . . (2) If an electronic mail message contains both the commercial advertisement or promotion of a commercial product or service as well as transactional or relationship content as set forth in paragraph (c) of this section, then the ‘primary purpose’ of the message shall be deemed to be commercial if:

(i) A recipient reasonably interpreting the subject line of the electronic mail message would likely conclude that the message contains the commercial advertisement or promotion of a commercial product or service; or

(ii) The electronic mail message’s transactional or relationship content as set forth in paragraph (c) of this section does not appear, in whole or in substantial part, at the beginning of the body of the message.”)