NYDFS addresses “potential confusion” over new consumer credit transaction SOL

State Issues State Regulators NYDFS Debt Collection New York State Attorney General Consumer Finance Consumer Credit Fairness Act Disclosures

On April 7, NYDFS issued guidance to debt collectors addressing potential confusion about how to comply with the notice requirements of 23 N.Y.C.R.R. § 1.3(b) that went into effect April 7. The new amendments are set forth in Section 4 of the Consumer Credit Fairness Act (which was enacted last November and was covered by InfoBytes here), and address the statute of limitations (SOL) applicable to actions arising out of consumer credit transactions. Specifically, Section 214-i provides that “when the applicable limitations period expires, any subsequent payment toward, written or oral affirmation of or other activity on the debt does not revive or extend the limitation period.” The amendments also decreased the SOL period to three years and requires additional notices to be made. While the guidance provides sample disclosure statements that address each of the requirements under § 1.3(b), NYDFS states that “23 N.Y.C.R.R. § 1.3 does not prohibit debt collectors from adding explanatory language to the model disclosure language set forth in § 1.3(c) or using their own language to comply with § 1.3(b).”

NYDFS’ guidance follows letters sent last month by the New York attorney general to several large credit card companies and major debt collectors operating in the state, which reminded entities about the new obligations and disclosures that will be required when filing collection lawsuits against consumers starting May 7. (Covered by InfoBytes here.)