Credit unions that serve Canadian members will be required tocomply with a new sweeping anti-spam law, which comes with heftyfinancial penalties and allows consumers to file class actionsuits.

The Canadian anti-spam law mandates all businesses not locatedin Canada to secure affirmative opt-ins from their customers whowant to continue receiving commercial electronic messages fromthose companies via email, SMS text messages and direct messagingon social media sites.

Though most of CASL’s provisions were enacted on July 1, the newlaw gives credit unions three years, or until July 1, 2017, tosecure affirmative opt-ins from their Canadian members, saidMichael S. Edwards, vice president and chief counsel for theWorld Council of Credit Unions in Wash. D.C.

Edwards said the new law means the U.S.A’s top trading partneris serious about going after “professional spammers” who blasthundreds of millions of spam emails from other countries toCanadian consumers.

Nevertheless, he stressed it’s important for credit unions takethis new law seriously or risk potentially expensive legalliabilities.

“That this law could apply to U.S. credit unions wasn’t reallyon anyone’s radar until recently,” Edwards said. “As it turns out, the law applies to anybody thatsends an email that is received in Canada. Hopefully, there won’tbe a lot of enforcement against people who are not seriousprofessional spammers, but that is a big question mark because theyhave only started to enforce the law on July 1.”

CASL defines a commercial electronic message as an email, textmessage or social media direct message that includes an offer topurchase, sell, barter or lease products, goods, services,land, or an offer to provide a business, investment or gamingopportunity.

The law authorizes the Canadian government to impose hugeadministrative monetary penalties of up to $10 million on anybusiness for violating CASL’s provisions.

“There is also a private right of action for consumers to suethe sender of unauthorized commercial electronic messages,” hesaid. “However, the private right of action does not take effectuntil July 1, 2017.”

Nonetheless, Edwards’s concern is that CASL’s private right ofaction could lead to class action lawsuits similar to those thathit U.S. financial institutions when they were required by federal law to post transaction fee disclosure stickers or signs onATMS.

“There were people driving around the country looking for ATMsthat did not have this sticker on them, and then they would fileclass action suits on behalf of everybody who used the ATM and paidthe fee,” he said. “Though Congress eventually changed the law,there were a number of settlements over the past five years wherefinancial institutions paid $20,000 or more just to make the classaction suits go away.”

It’s unknown how many Canadians are member of U.S. creditunions. However, there are dozens of cooperatives thatoperate branches near the U.S.-Canadian land border in 11 statesfrom Alaska to Maine where Canadians or U.S. citizens who live inCanada cross the border daily to work at a U.S. company. The newlaw also would affect other credit unions far from the border butserve international members such as the $4 billion United NationsFCU in Long Island City, which serves about 2,000 members who livein Canada.

At Maine’s northern tip, the $125 million Acadia Federal Credit Union in Fort Kent serves about 600Canadian members. The credit union has a total membership of 10,114and operates five branches along the St. John River that separatesthe U.S and Canada.

David D. Desjardins, president/CEO of Acadia FCU, said most ofthe Canadian members work on the U.S. side and live in Canada.Other members have a Canadian spouse or are retired and live inCanada.

“We certainly plan to review the law’s details, and we’llprobably have to include some additional disclosures when we signup new Canadian members,” Desjardins said. “For existing members wehave to figure out how best to proceed with this law.”

The $1 billion Whatcom Educational Credit Union in Bellingham, Wash., is lessthan 30 miles from the Canadian border but less than one-half of apercent of its 72,218 members live in Canada.

Kessa Volland, WECU marketing manager, doesn’t think theCanadian law will have much of an impact because the credit uniondoesn’t use email marketing. However, for members who have signedup for online banking, WECU does send them email notificationsabout their bank statements as well as a newsletter.

“Right now we tend to provide more educational information inthat notification rather than product/promotional information, so Ihope we’ll be in the clear,” Holland said.

But what about marketing messages on bank statements ornewsletters? Edwards believes credit unions would be in compliancebecause of implied consent.

“Even if the bank statement has commercial messages, under CASLthe customer has given implied consent to receive thatinformation,” he said.

The CASL opt-in consent may be in writing or oral, and mustinclude the following: the purpose for which consent is sought(i.e. permission to receive CEMs); identity of the name of therequester, including its business name; contact informationincluding mailing address and one of the following: telephonenumber, email address, or web address; and a statement that theperson can withdraw consent.

CASL also has requirements for what information features a CEMmust have, which are similar to the US’s CAN SPAM law but notidentical

“CASL requires an unsubscribe feature (like CAN SPAM) and thesender company’s contact info including mailing address and one ofthe following: telephone number, email address, or web address(similar to CAN SPAM’s requirement for the commercial email toinclude the sender’s physical address and an email address),”Edwards explained. “A difference from CAN SPAM is that CASL appliesto all forms of electronic messages, including SMS text messagesand direct messaging on social networks (such as a Facebookmessage), not just emails.”