Bill Text: NY S08959 | 2017-2018 | General Assembly | Amended
Bill Title: Enacts the "consumer credit fairness act"; establishes a 3 year statute of limitations for commencement of a cause of action arising out of a consumer credit transaction where the defendant is a purchaser, borrower or debtor; establishes a notice of lawsuit which must be mailed to the defendant in such a cause of action; establishes certain requirements for the complaint in such an action; provides for arbitration of such actions.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced - Dead) 2018-06-11 - PRINT NUMBER 8959A [S08959 Detail]
Download: New_York-2017-S08959-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 8959--A IN SENATE June 7, 2018 ___________ Introduced by Sen. FELDER -- read twice and ordered printed, and when printed to be committed to the Committee on Rules -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the civil practice law and rules, in relation to consum- er credit transactions The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Short title. This act shall be known and may be cited as 2 the "consumer credit fairness act". 3 § 2. Subdivision 2 of section 213 of the civil practice law and rules, 4 as amended by chapter 709 of the laws of 1988, is amended to read as 5 follows: 6 2. an action upon a contractual obligation or liability, express or 7 implied, except as provided in section two hundred thirteen-a or two 8 hundred fourteen-g of this article or article 2 of the uniform commer- 9 cial code or article 36-B of the general business law; 10 § 3. The civil practice law and rules is amended by adding a new 11 section 214-g to read as follows: 12 § 214-g. Certain actions arising out of consumer credit transactions 13 to be commenced within three years. An action arising out of a consumer 14 credit transaction where a purchaser, borrower or debtor is a defendant 15 must be commenced within three years, except as provided in section two 16 hundred thirteen-a of this article or article 2 of the uniform commer- 17 cial code or article 36-B of the general business law. When the period 18 within which an action may be commenced under this section has expired, 19 the right to collect consumer credit debt is extinguished as well as the 20 remedy. 21 For purposes of this section, "the right to collect consumer credit 22 debt" shall mean any attempts by the creditor, third party purchaser, or 23 other authorized third party to collect such debt including, but not 24 limited to, calls, mail or other attempts to collect. 25 § 4. The civil practice law and rules is amended by adding a new 26 section 306-d to read as follows: EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD02851-05-8S. 8959--A 2 1 § 306-d. Additional mailing of notice in an action arising out of a 2 consumer credit transaction. (a) At the time of filing with the clerk of 3 the proof of service of the summons and complaint in an action arising 4 out of a consumer credit transaction, the plaintiff shall submit to the 5 clerk a stamped unsealed envelope addressed to the defendant together 6 with a written notice in clear type of no less than twelve-point in 7 size, in both English and Spanish, and containing the following 8 language: 9 ADDITIONAL NOTICE OF LAWSUIT 10 (NAME OF COURT) 11 (COUNTY) 12 (STREET ADDRESS, ROOM NUMBER) 13 (CITY, STATE, ZIP CODE) 14 (NAME OF DEFENDANT) 15 (ADDRESS OF DEFENDANT) 16 Plaintiff:__________________________________ 17 Defendant:__________________________________ 18 Name of original creditor, unless same:______________________________ 19 Index number:_______________________________ 20 Attention: a lawsuit has been filed against you claiming that you owe 21 money for an unpaid consumer debt. 22 You should go to the court clerk's office at the above address as soon 23 as possible to respond to the lawsuit. You may wish to contact an attor- 24 ney. 25 If you do not respond to the lawsuit, the court may enter a money judg- 26 ment against you. Once entered, a judgment is good and can be used 27 against you for twenty years, and your personal property and money, 28 including a portion of your paycheck and/or bank account, may be taken 29 from you. Also, a judgment will affect your credit score and can affect 30 your ability to rent a home, find a job, or take out a loan. 31 You CANNOT be arrested or sent to jail for owing a debt. 32 It is important that you go to the court clerk's office listed above as 33 soon as possible. You should bring this notice and any legal papers you 34 may have received. Additional information can be found at the court 35 system website at: www.nycourts.gov 36 (b) The face of the envelope shall be addressed to the defendant at 37 the address at which process was served, and shall contain the defend- 38 ant's name, address (including apartment number) and zip code. The face 39 of the envelope also shall state the appropriate clerk's office as its 40 return address. 41 (c) The clerk promptly shall mail to the defendant the envelope 42 containing the additional notice set forth in subdivision (a) of this 43 section. No default judgment based on the defendant's failure to answer 44 shall be entered unless there has been compliance with this section, and 45 at least twenty days have elapsed from the date of mailing by the clerk. 46 No default judgment based on the defendant's failure to answer shall be 47 entered if the additional notice is returned to the court as undelivera- 48 ble. Receipt of the additional notice by the defendant does not confer 49 jurisdiction on the court in the absence of proper service of process. 50 § 5. Subdivision (a) of section 3012 of the civil practice law and 51 rules is amended to read as follows:S. 8959--A 3 1 (a) Service of pleadings. The complaint may be served with the 2 summons, except that in an action arising out of a consumer credit tran- 3 saction, the complaint shall be served with the summons. A subsequent 4 pleading asserting new or additional claims for relief shall be served 5 upon a party who has not appeared in the manner provided for service of 6 a summons. In any other case, a pleading shall be served in the manner 7 provided for service of papers generally. Service of an answer or reply 8 shall be made within twenty days after service of the pleading to which 9 it responds. 10 § 6. Rule 3016 of the civil practice law and rules is amended by 11 adding a new subdivision (j) to read as follows: 12 (j) Consumer credit transactions. In an action arising out of a 13 consumer credit transaction where a purchaser, borrower or debtor is a 14 defendant, the contract or other written instrument on which the action 15 is based shall be attached to the complaint and the following informa- 16 tion shall be set forth in the complaint: 17 1. The name of the original creditor; 18 2. The last four digits of the original account number; 19 3. The date and amount of the last payment; 20 4. If the complaint contains a cause of action based on an account 21 stated, the date that the final statement of account was mailed to the 22 defendant; 23 5. An itemization of the amount sought, by (i) principal; (ii) finance 24 charge or charges; (iii) fees imposed by the original creditor; (iv) 25 collection costs; (v) attorney's fees; (vi) interest; and (vii) any 26 other fees and charges. The term "finance charge" means a finance charge 27 as defined in Regulation Z, 12 C.F.R. § 226.4; 28 6. Whether the plaintiff is the original creditor. If the plaintiff is 29 not the original creditor, the complaint shall also state (i) the date 30 on which the debt was sold or assigned to the plaintiff; (ii) the name 31 of each previous owner of the account and the date on which the debt was 32 assigned to that owner; and (iii) the amount due at the time of the sale 33 or assignment of the debt by the original creditor; and 34 7. Any matters required to be stated with particularity pursuant to 35 subdivision (b) of this rule. 36 § 7. Subdivision (e) of rule 3211 of the civil practice law and rules, 37 as amended by chapter 616 of the laws of 2005, is amended to read as 38 follows: 39 (e) Number, time and waiver of objections; motion to plead over. At 40 any time before service of the responsive pleading is required, a party 41 may move on one or more of the grounds set forth in subdivision (a) of 42 this rule, and no more than one such motion shall be permitted. Any 43 objection or defense based upon a ground set forth in paragraphs one, 44 three, four, five and six of subdivision (a) of this rule is waived 45 unless raised either by such motion or in the responsive pleading. A 46 motion based upon a ground specified in paragraph two, seven or ten of 47 subdivision (a) of this rule may be made at any subsequent time or in a 48 later pleading, if one is permitted; in any action other than an action 49 arising out of a consumer credit transaction where a purchaser, borrower 50 or debtor is a defendant, an objection that the summons and complaint, 51 summons with notice, or notice of petition and petition was not properly 52 served is waived if, having raised such an objection in a pleading, the 53 objecting party does not move for judgment on that ground within sixty 54 days after serving the pleading, unless the court extends the time upon 55 the ground of undue hardship. The foregoing sentence shall not apply in 56 any proceeding under subdivision one or two of section seven hundredS. 8959--A 4 1 eleven of the real property actions and proceedings law. The papers in 2 opposition to a motion based on improper service shall contain a copy of 3 the proof of service, whether or not previously filed. An objection 4 based upon a ground specified in paragraph eight or nine of subdivision 5 (a) of this rule is waived if a party moves on any of the grounds set 6 forth in subdivision (a) of this rule without raising such objection or 7 if, having made no objection under subdivision (a) of this rule, he or 8 she does not raise such objection in the responsive pleading. 9 § 8. Subdivision (f) of section 3215 of the civil practice law and 10 rules, as amended by chapter 453 of the laws of 2006, is amended and a 11 new subdivision (j) is added to read as follows: 12 (f) Proof. On any application for judgment by default, the applicant 13 shall file proof of service of the summons and the complaint, or a 14 summons and notice served pursuant to subdivision (b) of rule 305 or 15 subdivision (a) of rule 316 of this chapter, and proof of the facts 16 constituting the claim, the default and the amount due by affidavit made 17 by the party, or where the state of New York is the plaintiff, by affi- 18 davit made by an attorney from the office of the attorney general who 19 has or obtains knowledge of such facts through review of state records 20 or otherwise. Where a verified complaint has been served, it may be used 21 as the affidavit of the facts constituting the claim and the amount due; 22 in such case, an affidavit as to the default shall be made by the party 23 or the party's attorney. In an action arising out of a consumer credit 24 transaction, if the plaintiff is not the original creditor, the appli- 25 cant shall include: (1) an affidavit by the original creditor of the 26 facts constituting the debt, the default in payment, the sale or assign- 27 ment of the debt, and the amount due at the time of sale or assignment; 28 (2) for each subsequent assignment or sale of the debt to another enti- 29 ty, an affidavit of sale of the debt by the debt seller, completed by 30 the seller or assignor; and (3) an affidavit of a witness of the plain- 31 tiff, which includes a chain of title of the debt, completed by the 32 plaintiff or plaintiff's witness. When jurisdiction is based on an 33 attachment of property, the affidavit must state that an order of 34 attachment granted in the action has been levied on the property of the 35 defendant, describe the property and state its value. Proof of mailing 36 the notice required by subdivision (g) of this section, where applica- 37 ble, shall also be filed. 38 (j) A request for a default judgment entered by the clerk, must be 39 accompanied by an affidavit by the debt collector (who may be the plain- 40 tiff or plaintiff's attorney) stating that after reasonable inquiry, he 41 or she has reason to believe that the statute of limitations has not 42 expired. 43 § 9. The civil practice law and rules is amended by adding a new 44 section 7516 to read as follows: 45 § 7516. Confirmation of an award based on a consumer credit trans- 46 action. In any proceeding under section 7510 of this article to confirm 47 an award based on a consumer credit transaction, the party seeking to 48 confirm the award shall plead the actual terms and conditions of the 49 agreement to arbitrate. The party shall attach to its petition (a) the 50 agreement to arbitrate; (b) the demand for arbitration or notice of 51 intention to arbitrate, with proof of service; and (c) the arbitration 52 award, with proof of service. If the award does not contain a statement 53 of the claims submitted for arbitration, of the claims ruled upon by the 54 arbitrator, and of the calculation of figures used by the arbitrator in 55 arriving at the award, then the petition shall contain such a statement. 56 The court shall not grant confirmation of an award based on a consumerS. 8959--A 5 1 credit transaction unless the party seeking to confirm the award has 2 complied with this section. 3 § 10. This act shall take effect on the first of January next succeed- 4 ing the date on which it shall have become a law, except that section 5 three of this act shall take effect on the one hundred fiftieth day 6 after this act shall have become a law.
