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
              

A. 3877                             2

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-

A. 3877                             3

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

A. 3877                             4

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.