New York Proposed Rules – Part 2
This week the New York Department of Financial Services (DFS) published the long anticipated revision of their proposed regulations on debt collection. In August 2013, DFS first proposed sweeping regulatory reforms on pre-litigation debt collection. DBA took a proactive leadership position in this year-long discussion by meeting with DFS staff and providing written comments to the proposed regulations where we raised a number of concerns and offered solutions.
The following DBA recommendations were accepted by the DFS:
- Using “charge-off” rather than “default” as the single point-of-time reference for establishing a number of regulatory requirements.
- Eliminating the pre-charge-off itemization requirement on account balances.
- Allowing consumers to make payments at initial contact instead of waiting until the written confirmation of the payment terms arrives by mail.
- Permitting email communications based on reasonable terms.
- Replacing an “immediate” effective date with a 90-day effective date.
The following issues still need to be resolved for debt buyers collecting in the state of New York:
- Ensure that the proposed documentation requirements apply prospectively and not retroactively.
- Provide debt collectors with clear written boilerplate consumer notice provisions so as to eliminate future frivolous litigation over the issue of adequate consumer notice.
- Clarify new and confusing requirements concerning “substantiation” of the debt.
DFS has provided a 30-day comment period on the revised proposed regulations.
Please read the proposed rule and let DBA know if you have any additional concerns no later than Friday, August 1, 2014 by emailing them to [email protected]
July 21, 2014