The revised proposal would serve as a permanent rule for debt collectors and debt buyers in the state if approved and includes proposed amendments on consumer communications and disclosures.
01/05/2023 10:35 A.M.
3 minute read
The comment period is now open for proposed third-party debt collection rules from the New York Department of Financial Services (NYDFS) through Feb. 13.
In November 2021, the NYDFS posted the previous draft proposed amendments to part one of the Regulations of the Superintendent of Financial Services (23 New York Codes, Rules, and Regulations Part 1, Debt Collection by Third-Party Debt Collectors and Debt Buyers) for comment, ACA International previously reported.
When the original proposal was issued last year, ACA sought clarity from the NYDFS on why it was moving forward with the proposed amended debt collection rules in the immediate wake of Gov. Kathy Hochul signing the New York Consumer Credit Fairness Act into law and detailed how the proposal directly conflicts with Regulation F.
In the new proposal (PDF), there are amendments to disclosure requirements, validation information for a debt, telephone and electronic communications and prohibitions on excessive communications or attempts to communicate with a consumer, among others.
For example, amendments in the proposal include:
- No debt collector shall communicate or attempt to communicate excessively with a consumer. For the purposes of this section, as to communication by telephone, it shall be presumed that a debt collector is in compliance with this section if the debt collector does not, without the prior written and revocable consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, communicate with a consumer in connection with the collection of any debts by more than one completed telephone call and three attempted telephone calls per seven-day period per alleged debt.
- A debt collector must provide substantiation of a debt to the consumer in hard copy by mail unless the consumer has consented to receive electronic communication, in which case a debt collector may provide substantiation in writing by electronic communication, or unless the consumer has requested the information be provided in a format other than hard copy writing in which case such substantiation shall be provided in the format requested by the consumer.
- In consumer communications, a debt collector must include a disclosure notice on the statute of limitations and notify a consumer that filing a lawsuit on an expired debt is a violation of the Fair Debt Collection Practices Act.
The complete proposal (PDF) is available through the NYDFS website.
What’s Next?
ACA International and the New York State Collectors Association are reviewing the new proposal and preparing comments to file with the NYDFS.
ACA and the New York unit will continue working with a broad industry coalition of advocates to ensure industry priorities are highlighted and that the NYDFS is aware of any conflicts in the proposed rule with federal, state and local laws. The focus on potential conflicts will include the recently proposed amendments to New York City’s debt collection regulations by the Department of Consumer and Worker Protection.
Visit the NYDFS website for more information on the revised proposed amendments and notice of proposed rulemaking. Comments may be submitted to Meredith Weill, deputy general counsel with the NYDFS, at [email protected].
For more updates, ACA also recommends members join the weekly ACA Huddle webinar at 11 a.m. CDT Wednesdays. The ACA Huddle features advocacy, compliance and education updates as well as guest speakers. One-time registration is available through the ACA events calendar.
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