New York Banking Regulator Urges Broad Changes To Debt Collection Affidavits

Debt Collection

On October 18, New York DFS Superintendent Benjamin Lawsky commented on the New York Unified Court System’s proposal to require debt collectors to use standardized affidavits as evidence of ownership of debt when seeking default judgments in consumer credit actions following an assignment of the original creditor’s interest. Superintendent Lawsky urged the Court System to pursue “bolder reform,” including requiring debt collectors to (i) present “stronger affidavits” to prevent “robo-signing” and ensure debt collectors review a consumer’s file, (ii) include information about the reviewed debts in the affidavit, (iii) include documentation evidencing the debt with the complaint, (iv) send consumers a pre-complaint notice before commencing a collection lawsuit, and (v) demonstrate proof of service when moving for a default judgment. The Superintendent also recommended that consumers be provided an opportunity to vacate a default judgment if a debt collector violates court rules. The Court System is accepting comments on its proposal through December 4, 2013.