S T A T E O F N E W Y O R K
________________________________________________________________________
3877
2015-2016 Regular Sessions
I N A S S E M B L Y
January 27, 2015
___________
Introduced by M. of A. WEINSTEIN, JAFFEE, TITONE, COLTON, GALEF, ABINAN-
TI, ZEBROWSKI, O'DONNELL, CRESPO, ROSENTHAL, SCARBOROUGH, FAHY, ROBIN-
SON, PEOPLES-STOKES, MILLER -- Multi-Sponsored by -- M. of A. BRENNAN,
COOK, CYMBROWITZ, DAVILA, GLICK, GOTTFRIED, MARKEY, OTIS, PERRY, SCHI-
MEL, SOLAGES -- read once and referred to the Committee on Judiciary
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:
Section 1. Short title. This act shall be known and may be cited as
the "consumer credit fairness act".
S 2. Subdivision 2 of section 213 of the civil practice law and rules,
as amended by chapter 709 of the laws of 1988, is amended to read as
follows:
2. an action upon a contractual obligation or liability, express or
implied, except as provided in section two hundred thirteen-a OR TWO
HUNDRED FOURTEEN-F of this article or article 2 of the uniform commer-
cial code or article 36-B of the general business law;
S 3. The civil practice law and rules is amended by adding a new
section 214-f to read as follows:
S 214-F. CERTAIN ACTIONS ARISING OUT OF CONSUMER CREDIT TRANSACTIONS
TO BE COMMENCED WITHIN THREE YEARS. AN ACTION ARISING OUT OF A CONSUMER
CREDIT TRANSACTION WHERE A PURCHASER, BORROWER OR DEBTOR IS A DEFENDANT
MUST BE COMMENCED WITHIN THREE YEARS, EXCEPT AS PROVIDED IN SECTION TWO
HUNDRED THIRTEEN-A OF THIS ARTICLE OR ARTICLE 2 OF THE UNIFORM COMMER-
CIAL CODE OR ARTICLE 36-B OF THE GENERAL BUSINESS LAW. WHEN THE PERIOD
WITHIN WHICH AN ACTION MAY BE COMMENCED UNDER THIS SECTION HAS EXPIRED,
THE RIGHT TO COLLECT CONSUMER CREDIT DEBT IS EXTINGUISHED AS WELL AS THE
REMEDY.
FOR PURPOSES OF THIS SECTION, "THE RIGHT TO COLLECT CONSUMER CREDIT
DEBT" SHALL MEAN ANY ATTEMPTS BY THE CREDITOR, THIRD PARTY PURCHASER, OR
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
A LBD00082-03-5
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OTHER AUTHORIZED THIRD PARTY TO COLLECT SUCH DEBT INCLUDING, BUT NOT
LIMITED TO, CALLS, MAIL OR OTHER ATTEMPTS TO COLLECT.
S 4. The civil practice law and rules is amended by adding a new
section 306-d to read as follows:
S 306-D. ADDITIONAL MAILING OF NOTICE IN AN ACTION ARISING OUT OF A
CONSUMER CREDIT TRANSACTION. (A) AT THE TIME OF FILING WITH THE CLERK OF
THE PROOF OF SERVICE OF THE SUMMONS AND COMPLAINT IN AN ACTION ARISING
OUT OF A CONSUMER CREDIT TRANSACTION, THE PLAINTIFF SHALL SUBMIT TO THE
CLERK A STAMPED UNSEALED ENVELOPE ADDRESSED TO THE DEFENDANT TOGETHER
WITH A WRITTEN NOTICE IN CLEAR TYPE OF NO LESS THAN TWELVE-POINT IN
SIZE, IN BOTH ENGLISH AND SPANISH, AND CONTAINING THE FOLLOWING
LANGUAGE:
ADDITIONAL NOTICE OF LAWSUIT
(NAME OF COURT)
(COUNTY)
(STREET ADDRESS, ROOM NUMBER)
(CITY, STATE, ZIP CODE)
(NAME OF DEFENDANT)
(ADDRESS OF DEFENDANT)
PLAINTIFF:__________________________________
DEFENDANT:__________________________________
NAME OF ORIGINAL CREDITOR, UNLESS SAME:______________________________
INDEX NUMBER:_______________________________
ATTENTION: A LAWSUIT HAS BEEN FILED AGAINST YOU CLAIMING THAT YOU OWE
MONEY FOR AN UNPAID CONSUMER DEBT.
YOU SHOULD GO TO THE COURT CLERK'S OFFICE AT THE ABOVE ADDRESS AS SOON
AS POSSIBLE TO RESPOND TO THE LAWSUIT. YOU MAY WISH TO CONTACT AN ATTOR-
NEY.
IF YOU DO NOT RESPOND TO THE LAWSUIT, THE COURT MAY ENTER A MONEY JUDG-
MENT AGAINST YOU. ONCE ENTERED, A JUDGMENT IS GOOD AND CAN BE USED
AGAINST YOU FOR TWENTY YEARS, AND YOUR PERSONAL PROPERTY AND MONEY,
INCLUDING A PORTION OF YOUR PAYCHECK AND/OR BANK ACCOUNT, MAY BE TAKEN
FROM YOU. ALSO, A JUDGMENT WILL AFFECT YOUR CREDIT SCORE AND CAN AFFECT
YOUR ABILITY TO RENT A HOME, FIND A JOB, OR TAKE OUT A LOAN.
YOU CANNOT BE ARRESTED OR SENT TO JAIL FOR OWING A DEBT.
IT IS IMPORTANT THAT YOU GO TO THE COURT CLERK'S OFFICE LISTED ABOVE AS
SOON AS POSSIBLE. YOU SHOULD BRING THIS NOTICE AND ANY LEGAL PAPERS YOU
MAY HAVE RECEIVED. ADDITIONAL INFORMATION CAN BE FOUND AT THE COURT
SYSTEM WEBSITE AT: WWW.NYCOURTS.GOV
(B) THE FACE OF THE ENVELOPE SHALL BE ADDRESSED TO THE DEFENDANT AT
THE ADDRESS AT WHICH PROCESS WAS SERVED, AND SHALL CONTAIN THE DEFEND-
ANT'S NAME, ADDRESS (INCLUDING APARTMENT NUMBER) AND ZIP CODE. THE FACE
OF THE ENVELOPE ALSO SHALL STATE THE APPROPRIATE CLERK'S OFFICE AS ITS
RETURN ADDRESS.
(C) THE CLERK PROMPTLY SHALL MAIL TO THE DEFENDANT THE ENVELOPE
CONTAINING THE ADDITIONAL NOTICE SET FORTH IN SUBDIVISION (A) OF THIS
SECTION. NO DEFAULT JUDGMENT BASED ON THE DEFENDANT'S FAILURE TO ANSWER
SHALL BE ENTERED UNLESS THERE HAS BEEN COMPLIANCE WITH THIS SECTION, AND
AT LEAST TWENTY DAYS HAVE ELAPSED FROM THE DATE OF MAILING BY THE CLERK.
NO DEFAULT JUDGMENT BASED ON THE DEFENDANT'S FAILURE TO ANSWER SHALL BE
ENTERED IF THE ADDITIONAL NOTICE IS RETURNED TO THE COURT AS UNDELIVERA-
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BLE. RECEIPT OF THE ADDITIONAL NOTICE BY THE DEFENDANT DOES NOT CONFER
JURISDICTION ON THE COURT IN THE ABSENCE OF PROPER SERVICE OF PROCESS.
S 5. Subdivision (a) of section 3012 of the civil practice law and
rules is amended to read as follows:
(a) Service of pleadings. The complaint may be served with the
summons, EXCEPT THAT IN AN ACTION ARISING OUT OF A CONSUMER CREDIT TRAN-
SACTION, THE COMPLAINT SHALL BE SERVED WITH THE SUMMONS. A subsequent
pleading asserting new or additional claims for relief shall be served
upon a party who has not appeared in the manner provided for service of
a summons. In any other case, a pleading shall be served in the manner
provided for service of papers generally. Service of an answer or reply
shall be made within twenty days after service of the pleading to which
it responds.
S 6. Rule 3016 of the civil practice law and rules is amended by
adding a new subdivision (i) to read as follows:
(I) CONSUMER CREDIT TRANSACTIONS. IN AN ACTION ARISING OUT OF A
CONSUMER CREDIT TRANSACTION WHERE A PURCHASER, BORROWER OR DEBTOR IS A
DEFENDANT, THE CONTRACT OR OTHER WRITTEN INSTRUMENT ON WHICH THE ACTION
IS BASED SHALL BE ATTACHED TO THE COMPLAINT AND THE FOLLOWING INFORMA-
TION SHALL BE SET FORTH IN THE COMPLAINT:
1. THE NAME OF THE ORIGINAL CREDITOR;
2. THE LAST FOUR DIGITS OF THE ORIGINAL ACCOUNT NUMBER;
3. THE DATE AND AMOUNT OF THE LAST PAYMENT;
4. IF THE COMPLAINT CONTAINS A CAUSE OF ACTION BASED ON AN ACCOUNT
STATED, THE DATE THAT THE FINAL STATEMENT OF ACCOUNT WAS MAILED TO THE
DEFENDANT;
5. AN ITEMIZATION OF THE AMOUNT SOUGHT, BY (I) PRINCIPAL; (II) FINANCE
CHARGE OR CHARGES; (III) FEES IMPOSED BY THE ORIGINAL CREDITOR; (IV)
COLLECTION COSTS; (V) ATTORNEY'S FEES; (VI) INTEREST; AND (VII) ANY
OTHER FEES AND CHARGES. THE TERM "FINANCE CHARGE" MEANS A FINANCE CHARGE
AS DEFINED IN REGULATION Z, 12 C.F.R. S 226.4.
6. WHETHER THE PLAINTIFF IS THE ORIGINAL CREDITOR. IF THE PLAINTIFF IS
NOT THE ORIGINAL CREDITOR, THE COMPLAINT SHALL ALSO STATE (I) THE DATE
ON WHICH THE DEBT WAS SOLD OR ASSIGNED TO THE PLAINTIFF; (II) THE NAME
OF EACH PREVIOUS OWNER OF THE ACCOUNT AND THE DATE ON WHICH THE DEBT WAS
ASSIGNED TO THAT OWNER; AND (III) THE AMOUNT DUE AT THE TIME OF THE SALE
OR ASSIGNMENT OF THE DEBT BY THE ORIGINAL CREDITOR.
7. ANY MATTERS REQUIRED TO BE STATED WITH PARTICULARITY PURSUANT TO
RULE 3015 OF THIS ARTICLE.
S 7. Subdivision (e) of rule 3211 of the civil practice law and rules,
as amended by chapter 616 of the laws of 2005, is amended to read as
follows:
(e) Number, time and waiver of objections; motion to plead over. At
any time before service of the responsive pleading is required, a party
may move on one or more of the grounds set forth in subdivision (a) OF
THIS RULE, and no more than one such motion shall be permitted. Any
objection or defense based upon a ground set forth in paragraphs one,
three, four, five and six of subdivision (a) OF THIS RULE is waived
unless raised either by such motion or in the responsive pleading. A
motion based upon a ground specified in paragraph two, seven or ten of
subdivision (a) OF THIS RULE may be made at any subsequent time or in a
later pleading, if one is permitted; IN ANY ACTION OTHER THAN AN ACTION
ARISING OUT OF A CONSUMER CREDIT TRANSACTION WHERE A PURCHASER, BORROWER
OR DEBTOR IS A DEFENDANT, an objection that the summons and complaint,
summons with notice, or notice of petition and petition was not properly
served is waived if, having raised such an objection in a pleading, the
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objecting party does not move for judgment on that ground within sixty
days after serving the pleading, unless the court extends the time upon
the ground of undue hardship. The foregoing sentence shall not apply in
any proceeding under subdivision one or two of section seven hundred
eleven of the real property actions and proceedings law. The papers in
opposition to a motion based on improper service shall contain a copy of
the proof of service, whether or not previously filed. An objection
based upon a ground specified in paragraph eight or nine of subdivision
(a) OF THIS RULE is waived if a party moves on any of the grounds set
forth in subdivision (a) OF THIS RULE without raising such objection or
if, having made no objection under subdivision (a) OF THIS RULE, he or
she does not raise such objection in the responsive pleading.
S 8. Subdivision (f) of section 3215 of the civil practice law and
rules, as amended by chapter 453 of the laws of 2006, is amended and a
new subdivision (j) is added to read as follows:
(f) Proof. On any application for judgment by default, the applicant
shall file proof of service of the summons and the complaint, or a
summons and notice served pursuant to subdivision (b) of rule 305 or
subdivision (a) of rule 316 of this chapter, and proof of the facts
constituting the claim, the default and the amount due by affidavit made
by the party, or where the state of New York is the plaintiff, by affi-
davit made by an attorney from the office of the attorney general who
has or obtains knowledge of such facts through review of state records
or otherwise. Where a verified complaint has been served, it may be used
as the affidavit of the facts constituting the claim and the amount due;
in such case, an affidavit as to the default shall be made by the party
or the party's attorney. IN AN ACTION ARISING OUT OF A CONSUMER CREDIT
TRANSACTION, IF THE PLAINTIFF IS NOT THE ORIGINAL CREDITOR, THE APPLI-
CANT SHALL INCLUDE: (1) AN AFFIDAVIT BY THE ORIGINAL CREDITOR OF THE
FACTS CONSTITUTING THE DEBT, THE DEFAULT IN PAYMENT, THE SALE OR ASSIGN-
MENT OF THE DEBT, AND THE AMOUNT DUE AT THE TIME OF SALE OR ASSIGNMENT;
(2) FOR EACH SUBSEQUENT ASSIGNMENT OR SALE OF THE DEBT TO ANOTHER ENTI-
TY, AN AFFIDAVIT OF SALE OF THE DEBT BY THE DEBT SELLER, COMPLETED BY
THE SELLER OR ASSIGNOR; AND (3) AN AFFIDAVIT OF A WITNESS OF THE PLAIN-
TIFF, WHICH INCLUDES A CHAIN OF TITLE OF THE DEBT, COMPLETED BY THE
PLAINTIFF OR PLAINTIFF'S WITNESS. When jurisdiction is based on an
attachment of property, the affidavit must state that an order of
attachment granted in the action has been levied on the property of the
defendant, describe the property and state its value. Proof of mailing
the notice required by subdivision (g) of this section, where applica-
ble, shall also be filed.
(J) A REQUEST FOR A DEFAULT JUDGMENT ENTERED BY THE CLERK, MUST BE
ACCOMPANIED BY AN AFFIDAVIT BY THE DEBT COLLECTOR (WHO MAY BE THE PLAIN-
TIFF OR PLAINTIFF'S ATTORNEY) STATING THAT AFTER REASONABLE INQUIRY, HE
OR SHE HAS REASON TO BELIEVE THAT THE STATUTE OF LIMITATIONS HAS NOT
EXPIRED.
S 9. The civil practice law and rules is amended by adding a new
section 7515 to read as follows:
S 7515. CONFIRMATION OF AN AWARD BASED ON A CONSUMER CREDIT TRANS-
ACTION. IN ANY PROCEEDING UNDER SECTION 7510 OF THIS ARTICLE TO CONFIRM
AN AWARD BASED ON A CONSUMER CREDIT TRANSACTION, THE PARTY SEEKING TO
CONFIRM THE AWARD SHALL PLEAD THE ACTUAL TERMS AND CONDITIONS OF THE
AGREEMENT TO ARBITRATE. THE PARTY SHALL ATTACH TO ITS PETITION (A) THE
AGREEMENT TO ARBITRATE; (B) THE DEMAND FOR ARBITRATION OR NOTICE OF
INTENTION TO ARBITRATE, WITH PROOF OF SERVICE; AND (C) THE ARBITRATION
AWARD, WITH PROOF OF SERVICE. IF THE AWARD DOES NOT CONTAIN A STATEMENT
A. 3877 5
OF THE CLAIMS SUBMITTED FOR ARBITRATION, OF THE CLAIMS RULED UPON BY THE
ARBITRATOR, AND OF THE CALCULATION OF FIGURES USED BY THE ARBITRATOR IN
ARRIVING AT THE AWARD, THEN THE PETITION SHALL CONTAIN SUCH A STATEMENT.
THE COURT SHALL NOT GRANT CONFIRMATION OF AN AWARD BASED ON A CONSUMER
CREDIT TRANSACTION UNLESS THE PARTY SEEKING TO CONFIRM THE AWARD HAS
COMPLIED WITH THIS SECTION.
S 10. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law, except that section
three of this act shall take effect on the one hundred fiftieth day
after this act shall have become a law.