Welcome to our latest edition of PULSE, where we bring you crucial updates on the proposed amendments to consumer debt collection rules in New York. In this issue, we’ll delve into the ongoing efforts by the New York Department of Financial Services (DFS) and the New York City Department of Consumer and Worker Protection (DCWP) to amend their regulations. Stay informed with the following key points:
Overview of Rulemaking Efforts
DFS and DCWP have been diligently working to amend their consumer debt collection rules. DFS’s process has been ongoing for nearly two years, while DCWP initiated its efforts last fall.
Proposed Amendments and Scope of Coverage
DFS’s amendments aim to overhaul existing regulations, broadening the coverage to include new debt types. Notably, New York City’s proposal introduces an unexpected twist by excluding creditors from its coverage.
Revised Disclosure Requirements and Communication Restrictions
Both agencies propose new disclosure requirements and additional restrictions on communications, particularly electronic communications. DFS explicitly requires written opt-in consent from consumers for debt collectors to communicate electronically.
Implications for Initial Disclosures and Verification/Substantiation:
DFS proposes significant changes to initial disclosure requirements, mandating written delivery and prohibiting electronic delivery. Additionally, the verification/substantiation process would require debt collectors to provide substantiation in response to disputes.
Industry Response and Comment Period
Trade associations are actively engaging with DFS and DCWP, providing comments and testimony on the proposed amendments. It is crucial for businesses to stay informed and participate during the comment period to have their voices heard.
Please note that these amendments are currently in the proposal stage, and the final rules may differ from the outlined details. However, being aware of these potential changes is essential for maintaining compliance and effective debt collection practices.
Stay tuned for further updates as the comment period progresses and the agencies publish the final amendments. We will continue to keep you informed and empowered to navigate these developments successfully.
