NEW YORK STATE ASSEMBLY PASSES GROUNDBREAKING BILL TO CRACK DOWN ON DEBT COLLECTION ABUSES

State Coalition Urges Senate to Pass Bill to Protect New Yorkers

The New York State Assembly passed groundbreaking legislation to address widespread abuses by the debt collection industry. The New Yorkers for Responsible Lending, a statewide coalition of 147 organizations, applauds Assembly Member Helene Weinstein for her leadership in the passage of this bill—the Consumer Credit Fairness Act (A7558A)—which raises standards for debt collection lawsuits in order to prevent debt buyers—companies that buy old debts for pennies on the dollar—from routinely filing meritless lawsuits and getting judgments on invalid debts. The bill has been introduced in the New York State Senate by Senator Eric Schneiderman.

“The Assembly has taken a major step by passing this legislation to protect vulnerable New Yorkers from unscrupulous debt collection practices,” said Lois Aronstein, AARP NYS Director. “We call upon the Senate to pass this important legislation before it adjourns for the summer.”

Every year, debt buyers bring hundreds of thousands of “junk” debt collection lawsuits against New Yorkers. “Debt buyers frequently lack valid proof that the people they’re suing actually owe the money,” said Peter Dellinger, Senior Attorney at Empire Justice Center. “Also, many of the claims are invalid to begin with because they result from identity theft or the statute of limitations has passed.”

“The lawsuits are especially abusive because New Yorkers often receive no notice that they were sued until after judgments have already been entered against them,” said Claudia Wilner, Senior Staff Attorney at NEDAP. “Debt buyers wreak havoc on people’s lives by using these judgments to freeze people’s bank accounts and garnish their wages.”

The bill includes provisions to ensure that New Yorkers receive actual notice of debt collection lawsuits and to protect New Yorkers from unintentionally waiving valid defenses because they are unaware of their legal rights.

“Thousands of New Yorkers, many of them elderly, will be harmed if the Senate fails to pass this critical legislation.” said Gina Calabrese, Professor of Clinical Education and Associate Director of the St. John’s University School of Law Elder Law Clinic

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New Yorkers for Responsible Lending (NYRL) is a state-wide coalition established in 2000 to promote access to fair and affordable financial services and the preservation of assets for all New Yorkers and their communities. NYRL’s 147 members represent community financial institutions, community-based organizations, affordable housing and first-time homebuyer groups, advocates for seniors, legal services organizations, and community reinvestment, fair lending, and consumer advocacy groups. For more information, go to nedap.org/programs/nyrl.html.