Webinar Date & Time: January 28, 2020 at 9:00am PT/12:00pm ET

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Late Tuesday, New York Governor Andrew Cuomo introduced a proposal to license debt collectors as part of his 2021 budget. If enacted, the measure would take effect on October 1, 2020.

Licensure Summary

In addition to licensing debt collectors, the bill also includes the licensure of “any person who engages in a business, a principal purpose of which is . . .  debt buying.” The proposed license would require annual renewal, along with reporting of business activities, record retention and audit requirements. Licensed entities will also be required to post a surety bond which can be used by consumers to recover certain judgments against licensed entities. RMAI has engaged with Governor Cuomo’s office on this subject and favors licensure, but the bill does not incorporate key components of RMAI’s initiative and includes regulations harmful to consumers and legitimate businesses.

Conduct Regulations

Although several of the bills conduct regulating provisions mirror those contained in the federal Fair Debt Collection Practices Act, it includes proposals that appear designed to thwart the federal Consumer Financial Bureau’s proposed FDCPA rules on voicemail and electronic communications. The bill also limits consumer communications by debt collectors to two over a seven-day period. While the New York City Department of Consumer Affairs has a similar cap, the proposed state cap does not contain exceptions found in the NYDCA rule.

Additional Disclosures

The bill also proposes the licensees send yet another disclosure to consumers. The bill would prohibit communications with debtors until the disclosure is sent and requires the sending of the notice within five days of the first communication. The content of the notice is not proposed, leaving its development to the banking superintendent.

Conflicting Regulatory Framework

New York City, Buffalo and Yonkers all license debt collectors. RMAI advocated for a unified licensing and regulatory authority in New York state to alleviate the redundant and often conflicting regulatory structure that now exists. The proposed legislation does nothing to cure this problem, and only compounds it.

RMAI Action

RMAI is active in New York State engaging with legislators, regulators, and consumer advocates to achieve solutions benefiting consumers and RMAI members. RMAI’s efforts will be redoubled in Albany as a result of this proposal.

Join us next week as we discuss the New York licensure bill as well as other bills in New York and RMAI’s past, present and future action to promote and protect our members’ interests. The presentation qualifies for one (1) certification credit. You can register here.

This Alert is intended for Members of RMAI and is for informational purposes only; it is in no way intended to provide legal advice. Members are encouraged to consult with an attorney of their choice for legal advice concerning this matter.