NY State Senate Bill S4827E

Archive: Last Bill Status - In Senate Committee Judiciary Committee

Introduced
In Committee
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- Passed Senate
- Passed Assembly
Delivered to Governor
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Actions

view actions (15)

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jul 22, 2020	print number 4827e
Jul 22, 2020	amend and recommit to judiciary
Jul 10, 2020	print number 4827d
Jul 10, 2020	amend and recommit to judiciary
May 29, 2020	print number 4827c
May 29, 2020	amend and recommit to judiciary
Jan 08, 2020	referred to judiciary
Jun 20, 2019	recommitted to rules
Jun 19, 2019	ordered to third reading cal.1771 committee discharged and committed to rules
Jun 13, 2019	print number 4827b
Jun 13, 2019	amend and recommit to judiciary
Jun 06, 2019	print number 4827a
Jun 06, 2019	amend (t) and recommit to judiciary
Mar 26, 2019	referred to judiciary

Votes

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Jun 19, 2019 - Rules committee Vote

S4827B

committee

Aye

Nay

Aye with Reservations

Absent

Excused

Abstained

Bill Amendments

Original

E (Active)

Original

E (Active)

S4827 - Details

See Assembly Version of this Bill:: A6909
Current Committee:: Senate Judiciary
Law Section:: Civil Practice Law and Rules
Laws Affected:: Amd CPLR, generally; amd §212, Judy L
Versions Introduced in Other Legislative Sessions:: 2013-2014: A2678
2015-2016: A3877, A4438
2017-2018: S8959, A1752
2021-2022: S153, A2382

S4827 - Summary

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… (view more) provides for arbitration of such actions.

S4827 - Sponsor Memo

 
BILL NUMBER: S4827

SPONSOR: THOMAS
 
TITLE OF BILL:  An act to amend the civil practice law and rules, in
relation to consumer credit transactions

 
PURPOSE OF BILL:

This bill would strengthen consumer protections in consumer debt
collection proceedings.

 
SUMMARY OF PROVISIONS OF BILL:

The bill would require that the complaint in consumer credit actions
provide the name of the original creditor, the last four digits of the
original account number, the date and amount of the last payment, a
chain of title of the account, and a breakdown of the amount that the
plaintiff seeks to collect. The bill also requires that a copy of the
contract be attached to the complaint.

The bill would reduce the statute of limitations on consumer credit

actions from six years to three years. The bill would also bar debt
collectors from collecting debts on which the statute of limitations has
expired.

It would require that an additional notice of a pending consumer credit
action be mailed to the defendant by the clerk of the court.  This is
required in New York City and the bill would adopt this requirement
statewide.

The bill would permit defendants in consumer credit actions to raise
improper service as a defense in their answer and preserve that defense
for trial without having to file a separate motion to dismiss within 60
days as under current law.

To prevent the entry of default judgments on claims which have no merit,
the bill would require applications for default judgments in consumer
credit actions to include specific pleading requirements.  These include
(1) an affidavit by the original creditor of the facts constituting the
debt, the default in payment, the sale or assignment of the debt, and
the amount due at the time of sale or assignment; (2) for each subse-
quent assignment or sale of the debt to another entity, an affidavit of
sale of the debt by the debt seller, completed by the seller or assig-
nor; and (3) an affidavit of a witness- of the plaintiff, which includes
a chain of title of the debt, completed by the plaintiff or plaintiffs
witness. The bill will also require that applications for default judg-
ments in consumer credit actions include a statement that after reason-
able inquiry, the creditor has reason to believe that the statute of
limitations has not expired.

 
JUSTIFICATION:

There have been serious concerns reported about the growing problem of
abusive debt collection practices including filing suit on debts that
are too old to be sued on, are a result of identity theft or are debts
that have been paid or otherwise discharged. Other reported concerns
include lack of notice to the defendant of the law suit resulting in a
default judgment against the defendant without a requirement to produce
proof of the debt sued on.
Abusive debt collection lawsuits exploit current gaps in our state's
civil procedure laws and rules. The proposed legislation helps to fill
those gaps. In doing so, this legislation will protect all consumers,
and will particularly help ameliorate some of the forms of economic
abuse, including identity theft, suffered by domestic violence victims
at the hands of their abusers.

At a hearing on economic abuse as a form of domestic abuse, held on
December 5, 2012, by the New York State Assembly Committees on Judiciary
and Codes, civil legal service providers, domestic violence prevention
advocates and the Office of Court Administration highlighted the insid-
ious and pervasive nature of various forms of economic abuse perpetrated
by abusers in the family violence context to exercise power and control
over their victims and their fmances.  The types of abuse cited included
incurring debt in the survivor's name through false statements or coer-
cion, perpetrating identity theft or otherwise incurring debt without
the survivor's knowledge. Witnesses at the hearing cited this legis-
lation as important and helpful to ameliorating economic abuse suffered
by domestic abuse survivors.

This legislation requires statewide institution of additional notice
requirements that are presently in place in New York City., There is a
significant and documented problem with faulty service that results in
default judgments with serious life-altering ramifications.  Without
notice, defendants do not appear in court, and debt buyers easily obtain
default judgments. These judgments are enforced by freezing people's
bank accounts and garnishing their wages, hampering their ability to
then pay for basic necessities such as food, utilities, medication and
housing. These judgments appear on people's credit reports, making it
close to impossible for them to secure housing or employment, or to take
out a loan. The provisions of this bill would protect all consumers and
domestic abuse survivors in particular, by ensuring that New Yorker's
receive actual notice of debt collection actions.

To ensure that default judgment applications in debt collection lawsuits
are evaluated on the merits, this bill also requires court papers to
include more information about the debt sued upon. This would ensure
that all New Yorkers will be better able to identify the debt or account
on which they are being sued. There are many debts that result from
identity theft or mistaken identity and, in other situations the defend-
ant may not recognize the debt as theirs from the minimal information
provided on the initial filing of legal papers and may therefore not
respond. We learned from the hearing on economic abuse as a form of
domestic abuse, that this legislation will be particularly important for
domestic violence survivors as it will help them identify the debt and
assert defenses in cases involving debts they did not voluntarily incur
but that were incurred by their abusers in the survivor's name.

This legislation will reduce the statute of limitations for consumer
credit actions from six to three years. Reducing the statute of limita-
tions requires creditors to file their claims while memories are fresh
and records are, still available. States with three year statutes of
limitation include: Arizona, Arkansas, Delaware, Kansas, Louisiana,
Maryland, Mississippi, Montana, and the District of Columbia. Pennsylva-
nia has a two-year statute of limitation. In response to the now common
practice of selling time-barred debt this bill would also extinguish the
right to collect the debt after the statute of limitation has expired.

States with similar requirements include Wisconsin and Mississippi.
Debt collection actions are rife with poor service and default judgments
that are obtained after the statute of limitations have expired. To
address this problem, the bill will require that applications for
default judgments in consumer credit actions include a statement that
the creditor has reason to believe that the statute of limitations has
not expired and it will protect defendants from unknowingly waiving the
legitimate defense that a debt is past the statute of limitations or
that they were improperly served.

This legislation will benefit all consumers and for domestic violence
survivors, it will go a long way toward helping break the perfect cycle
of violence and domestic abuse that enables perpetrators of domestic
abuse to exercise control over their victims and their finances in a
manner that prevents the victim from leaving a dangerous relationship or
forces them to return to it.

 
LEGISLATIVE HISTORY:

2018: A.1752-A/S.8959-A - A.Cal/S.Rules
2017: A.1752 - A.Cal.
2016: A.4438 - A. Judi
2015: A.4438 A. Cal.
2013-14: Similar to A.9053/S.2454 - Passed Assembly/S. Judiciary
2011-12: Similar to A.633/S.677-A- Assembly Calendar/S. Judiciary
2010: A.7558-A/S.4398-A - Passed Assembly/S. Finance
2009: A.7558-A/S.439S-A - Passed Assembly/S. Codes

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
January 1, after becoming law. Section three of the bill, which shortens
the statute of limitations, will take effect 150 days after becoming
law.

S4827 - Bill Text download pdf


                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

    S. 4827                                                  A. 6909

                       2019-2020 Regular Sessions

                      S E N A T E - A S S E M B L Y

                             March 26, 2019
                               ___________

IN  SENATE -- Introduced by Sen. THOMAS -- read twice and ordered print-
  ed, and when printed to be committed to the Committee on Judiciary

IN ASSEMBLY -- Introduced by M. of A. WEINSTEIN, JAFFEE, COLTON,  GALEF,
  ABINANTI,  ZEBROWSKI,  O'DONNELL,  FAHY, PEOPLES-STOKES, L. ROSENTHAL,
  M. G. MILLER, DINOWITZ, SEAWRIGHT, GLICK, WEPRIN,  MOSLEY,  TAYLOR  --
  Multi-Sponsored  by  --  M.  of  A. CAHILL, COOK, CYMBROWITZ, EPSTEIN,
  GOTTFRIED, McDONOUGH, PERRY -- 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".
  § 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-H  of this article or article 2 of the uniform commer-
cial code or article 36-B of the general business law;
  § 3. The civil practice law and rules  is  amended  by  adding  a  new
section 214-h to read as follows:
  §  214-H.  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,

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD00927-06-9

S. 4827                             2                            A. 6909

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
OTHER AUTHORIZED THIRD PARTY TO COLLECT SUCH  DEBT  INCLUDING,  BUT  NOT
LIMITED TO, CALLS, MAIL OR OTHER ATTEMPTS TO COLLECT.
  §  4.  The  civil  practice  law  and rules is amended by adding a new
section 306-d to read as follows:
  § 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 MAY WISH TO CONTACT AN ATTORNEY.
  YOU  SHOULD  RESPOND  TO  THE LAWSUIT AS SOON AS POSSIBLE BY FILING AN
"ANSWER" WHICH MAY BE DONE AT THE COURT CLERK'S OFFICE LISTED ABOVE.
  IF YOU DO NOT RESPOND TO THE LAWSUIT, THE  COURT  MAY  ENTER  A  MONEY
JUDGMENT  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 MAY 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.
ADDITIONAL  INFORMATION  CAN  BE  FOUND  AT THE COURT SYSTEM WEBSITE AT:
WWW.NYCOURTS.GOV
SOURCES OF INFORMATION AND ASSISTANCE:
THE COURT ENCOURAGES YOU TO INFORM YOURSELF  ABOUT  YOUR  OPTIONS  AS  A
DEFENDANT  IN  THIS  LAWSUIT.  IN  ADDITION TO SEEKING ASSISTANCE FROM A
PRIVATE ATTORNEY OR LEGAL AID OFFICE, THERE ARE  FREE  LEGAL  ASSISTANCE
PROGRAMS  THAT YOU CAN USE ONLINE TO HELP YOU REPRESENT YOURSELF IN THIS
LAWSUIT.
FOR FURTHER INFORMATION, OR TO LOCATE AN ENTITY OR PROGRAM NEAR YOU, YOU
MAY VISIT THE NEW YORK  STATE  UNIFIED  COURT  SYSTEM'S  "RESOURCES  FOR
UNREPRESENTED LITIGANTS" WEBSITE AT:
HTTP://WW2.NYCOURTS.GOV/RULES/CCR/RESOURCES.SHTML

S. 4827                             3                            A. 6909

  (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-
BLE.  RECEIPT  OF THE ADDITIONAL NOTICE BY THE DEFENDANT DOES NOT CONFER
JURISDICTION ON THE COURT IN THE ABSENCE OF PROPER SERVICE OF PROCESS.
  § 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.
  § 6. Rule 3016 of the civil practice  law  and  rules  is  amended  by
adding a new subdivision (j) to read as follows:
  (J)  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. § 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; AND
  7.  ANY  MATTERS  REQUIRED TO BE STATED WITH PARTICULARITY PURSUANT TO
RULE THREE THOUSAND FIFTEEN OF THIS ARTICLE.
  § 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

S. 4827                             4                            A. 6909

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; 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 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 TO COLLECT A DEBT ARISING OUT OF A  CONSUMER
CREDIT  TRANSACTION WHERE A CONSUMER IS A DEFENDANT OR 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 WHICH, IN ANY ACTION TO  COLLECT  A
DEBT  ARISING OUT OF A CONSUMER CREDIT TRANSACTION WHERE A CONSUMER IS A
DEFENDANT, INCLUDES ANY AMENDED RESPONSIVE PLEADING.
  § 8. Rule 3212 of the civil practice  law  and  rules  is  amended  by
adding a new subdivision (j) to read as follows:
  (J)  ADDITIONAL NOTICE IN ANY ACTION TO COLLECT A DEBT ARISING  OUT OF
A CONSUMER CREDIT TRANSACTION WHERE A CONSUMER IS A DEFENDANT.
  1. AT THE TIME OF SERVICE OF A NOTICE OF MOTION ANY  PART  OF    WHICH
REQUESTS  SUMMARY  JUDGMENT IN WHOLE OR IN PART, WHERE THE  MOVING PARTY
IS A PLAINTIFF AND THE RESPONDENT IS A CONSUMER DEFENDANT IN  AN  ACTION
TO  COLLECT  A  DEBT  ARISING OUT OF A  CONSUMER CREDIT TRANSACTION, AND
WHERE THE CONSUMER DEFENDANT AGAINST  WHOM SUMMARY JUDGMENT IS SOUGHT IS
NOT REPRESENTED BY AN ATTORNEY, THE PLAINTIFF SHALL SERVE, TOGETHER WITH
THE NOTICE OF MOTION, THE FOLLOWING ADDITIONAL NOTICE TO BE  PRINTED  IN
CLEAR TYPE NO LESS THAN TWELVE-POINT IN SIZE:
                  IMPORTANT NOTICE TO PRO SE DEFENDANTS
(NAME OF COURT)
(STREET ADDRESS, ROOM NUMBER)
(CITY, STATE, ZIP CODE)

PLAINTIFF:
DEFENDANT:
INDEX NUMBER:

MOTION RETURN DATE AND TIME:

ATTENTION CPLR RULE 3212 MOTION FOR SUMMARY JUDGMENT

THIS NOTICE IS TO ADVISE YOU THAT THE PLAINTIFF IN THIS CASE HAS FILED A
MOTION  FOR  SUMMARY  JUDGMENT  AGAINST  YOU PURSUANT TO CPLR RULE 3212,
WHICH MEANS THAT SUMMARY JUDGMENT WILL BE GRANTED  IF  THE  COURT  FINDS
THAT  THERE  IS  NO  GENUINE  ISSUE AS TO ANY MATERIAL FACT AND THAT THE
PLAINTIFF IS ENTITLED TO JUDGMENT AS A MATTER OF LAW.

S. 4827                             5                            A. 6909

FAILURE TO RESPOND TO THIS MOTION FOR SUMMARY JUDGMENT MAY RESULT  IN  A
MONEY JUDGMENT BEING ENTERED AGAINST YOU IN FAVOR OF THE PLAINTIFF.

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
MAY  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.

OPPOSING THIS MOTION FOR SUMMARY JUDGMENT:

IF  YOU  WISH TO OPPOSE THE PLAINTIFF'S REQUEST FOR JUDGMENT, YOU SHOULD
SET FORTH IN A WRITTEN  RESPONSE THE REASONS THAT THE PLAINTIFF HAS  NOT
SHOWN  THAT IT IS ENTITLED TO JUDGMENT AS A MATTER OF LAW, AND ANY FACTS
THAT YOU BELIEVE SHOW THAT YOU ARE NOT LIABLE TO THE PLAINTIFF OR HAVE A
DEFENSE. YOU SHOULD SUBMIT AFFIDAVITS OR EXHIBITS SUPPORTING  ANY  FACTS
THAT  YOU  ASSERT  SHOW  THAT YOU ARE NOT LIABLE OR HAVE A DEFENSE. EACH
AFFIDAVIT SHOULD SET FORTH RELEVANT  FACTS  AND  SHOW  THAT  THE  PERSON
SUBMITTING  THE  AFFIDAVIT HAS PERSONAL KNOWLEDGE OF THOSE FACTS. IF YOU
RELY ON  EXHIBITS, YOU SHOULD ATTACH COPIES OF THEM TO AN AFFIDAVIT THAT
EXPLAINS WHAT THEY ARE AND HOW THEY SHOW THAT YOU ARE NOT LIABLE OR HAVE
A DEFENSE. YOU SHOULD BRING YOUR OPPOSITION PAPERS    TO  COURT  ON  THE
COURT DATE AND MAIL A COPY TO THE PLAINTIFF'S ATTORNEY IN ADVANCE OF THE
COURT DATE. YOU SHOULD ALSO ATTEND COURT ON THE RETURN DATE.

SOURCES OF INFORMATION AND ASSISTANCE:

THE  COURT  ENCOURAGES  YOU  TO  INFORM YOURSELF ABOUT YOUR OPTIONS AS A
DEFENDANT IN THIS LAWSUIT.   IN ADDITION TO SEEKING  ASSISTANCE  FROM  A
PRIVATE  ATTORNEY  OR LEGAL AID OFFICE, THERE MAY BE FREE  LEGAL ASSIST-
ANCE PROGRAMS THAT YOU MAY CONTACT FOR HELP IN REPRESENTING YOURSELF  IN
THIS LAWSUIT.

FOR FURTHER INFORMATION, OR TO LOCATE AN ENTITY OR PROGRAM NEAR YOU, YOU
MAY  VISIT  THE  NEW  YORK  STATE  UNIFIED COURT SYSTEM'S "RESOURCES FOR
UNREPRESENTED LITIGANTS" WEBSITE AT:
HTTP://WW2.NYCOURTS.GOV/RULES/CCR/RESOURCES.SHTML
  2. THE PLAINTIFF SEEKING SUMMARY JUDGMENT SHALL FILE PROOF OF  SERVICE
OF  THE  ADDITIONAL NOTICE  WITH THE COURT, AND NO MOTION FOR WHICH THIS
ADDITIONAL NOTICE IS REQUIRED SHALL BE GRANTED   UNLESS  SUCH  PROOF  OF
SERVICE HAS BEEN FILED.
  §  9.  Section 3213 of the civil practice law and rules, as amended by
chapter 210 of the laws of 1969, is amended to read as follows:
  § 3213. Motion for summary judgment in  lieu  of  complaint.  When  an
action is based upon an instrument for the payment of money only or upon
any  judgment,  the  plaintiff  may  serve  with the summons a notice of
motion for summary judgment and the  supporting  papers  in  lieu  of  a
complaint.  The summons served with such motion papers shall require the
defendant to submit answering papers  on  the  motion  within  the  time
provided  in the notice of motion. The minimum time such motion shall be
noticed to be heard shall be as provided by subdivision (a) of rule  320
for  making  an appearance, depending upon the method of service. If the
plaintiff sets the hearing date of the motion  later  than  the  minimum
time  therefor,  he  may  require  the  defendant to serve a copy of his
answering papers upon him within  such  extended  period  of  time,  not

S. 4827                             6                            A. 6909

exceeding  ten days, prior to such hearing date. No default judgment may
be entered pursuant to subdivision (a) of  section  3215  prior  to  the
hearing  date  of  the  motion.  If the motion is denied, the moving and
answering papers shall be deemed the complaint and answer, respectively,
unless  the  court orders otherwise.   THE ADDITIONAL NOTICE REQUIRED BY
SUBDIVISION (J) OF RULE THIRTY-TWO HUNDRED TWELVE OF THIS ARTICLE  SHALL
BE APPLICABLE TO A MOTION MADE PURSUANT TO THIS SECTION IN ANY ACTION TO
COLLECT  A  DEBT  ARISING  OUT  OF A CONSUMER CREDIT TRANSACTION WHERE A
CONSUMER IS A DEFENDANT.
  § 10. 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  PLAINTIFF  OR  PLAINTIFF'S  ATTORNEY
STATING  THAT  AFTER REASONABLE INQUIRY, HE OR SHE HAS REASON TO BELIEVE
THAT THE STATUTE OF LIMITATIONS HAS NOT EXPIRED.
  § 11. The civil practice law and rules is  amended  by  adding  a  new
section 7516 to read as follows:
  §  7516.  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
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

S. 4827                             7                            A. 6909

CREDIT  TRANSACTION  UNLESS  THE  PARTY SEEKING TO CONFIRM THE AWARD HAS
COMPLIED WITH THIS SECTION.
  § 12. 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.

S4827A - Details

See Assembly Version of this Bill:: A6909
Current Committee:: Senate Judiciary
Law Section:: Civil Practice Law and Rules
Laws Affected:: Amd CPLR, generally; amd §212, Judy L
Versions Introduced in Other Legislative Sessions:: 2013-2014: A2678
2015-2016: A3877, A4438
2017-2018: S8959, A1752
2021-2022: S153, A2382

S4827A - Summary

S4827A - Sponsor Memo

 
BILL NUMBER: S4827A

SPONSOR: THOMAS
 
TITLE OF BILL:

An act to amend the civil practice law and rules and the judiciary law,
in relation to consumer credit transactions

 
PURPOSE OF BILL:

This bill would strengthen consumer protections in consumer debt
collection proceedings.

 
SUMMARY OF PROVISIONS OF BILL:

The bill would require that the complaint in consumer credit actions
provide the name of the original creditor, the last four digits of the
original account number, the date and amount of the last payment, a
chain of title of the account, and a breakdown of the amount that the
plaintiff seeks to collect. The bill also requires that a copy of the
contract be attached to the complaint.

The bill would reduce the statute of limitations on consumer credit
actions from six years to three years. The bill would also bar debt
collectors from collecting debts on which the statute of limitations has
expired.

It would require that an additional notice, of a pending consumer credit
action be mailed to the defendant by the clerk of the court.  This is
required in New York City and the bill would adopt this requirement
statewide. The chief administrative judge would be required to make
available Spanish translations of said additional notices.

The bill would permit defendants in consumer credit actions to raise
improper service as a defense in their answer and preserve that defense
for trial without having to file a separate motion to dismiss within 60
days as under current law.

To prevent the entry of default judgments on claims which have no merit,
the bill would require applications for default judgments in consumer
credit actions to include specific pleading requirements.  These include
(1) an affidavit by the original creditor of the facts constituting the
debt, the default in payment, the sale or assignment 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 plaintiffs witness. The bill will also require that appli-
cations for default judgments in consumer credit actions include a
statement that after reasonable inquiry, the creditor has reason to
believe that the statute of limitations has not expired. Finally, the
chief administrative judge would be required to issue form affidavits
for default motions based upon consumer credit transactions, which would
standardize and make uniform the motion disposition process for the
courts.

 
JUSTIFICATION:
There have been serious concerns reported about the growing problem of
abusive debt collection practices including filing suit on debts that
are too old to be sued on, are a result of identity theft or are debts
that have been paid or otherwise discharged. Other reported concerns
include lack of notice to the defendant of the law suit resulting in a
default judgment against the defendant without a requirement to produce
proof of the debt sued on.

Abusive debt collection lawsuits exploit current gaps in our state's
civil procedure laws and rules. The proposed legislation helps to fill
those gaps. In doing so, this legislation will protect all consumers,
and will particularly help ameliorate some of the forms of economic
abuse, including identity theft, suffered by domestic violence victims
at the hands of their abusers.

At a hearing on economic abuse as a form of domestic abuse, held on
December 5, 2012, by the New York State Assembly Committees on Judiciary
and Codes, civil legal service providers, domestic violence prevention
advocates and the Office of Court Administration highlighted the insid-
ious and pervasive nature of various forms of economic abuse perpetrated
by abusers in the family violence context to exercise power and control
over their victims and their finances.  The types of abuse cited
included incurring debt in the survivor's name through false statements
or coercion, perpetrating identity theft or otherwise incurring debt
without the survivor's knowledge.

Witnesses at the hearing cited this legislation as important and helpful
to ameliorating economic abuse suffered by domestic abuse survivors.

This legislation requires statewide institution of additional notice
requirements that are presently in place in New York City. There is a
significant and documented problem with faulty service that results in
default judgments with serious life-altering ramifications.  Without
notice, defendants do not appear in court, and debt buyers easily obtain
default judgments. These judgments are enforced by freezing people's
bank accounts and garnishing their wages, hampering their ability to
then pay for basic necessities such as food, utilities, medication and
housing. These judgments appear on people's credit reports, making it
close to impossible for them to secure housing or employment, or to take
out a loan. The provisions of this bill would protect all consumers and
domestic abuse survivors in particular, by ensuring that New Yorkers
receive actual notice of debt collection actions.

To ensure that default judgment applications in debt collection lawsuits
are evaluated on the merits, this bill also requires court papers to
include more information about the debt sued upon. This would ensure
that all New Yorkers will be better able to identify the debt or account
on which they are being sued. There are many debts that result from
identity theft or mistaken identity and, in other situations the defend-
ant may not recognize the debt as theirs from the minimal information
provided on the initial filing of legal papers and may therefore not
respond. We learned from the hearing on economic abuse as a form of
domestic abuse, that this legislation will be particularly important for
domestic violence survivors as it will help them identify the debt and
assert defenses in cases involving debts they did not voluntarily incur
but that were incurred by their abusers in the survivor's name.


This legislation will reduce the statute of limitations for consumer
credit actions from six to three years. Reducing the statute of limita-
tions requires creditors to file their claims while memories are fresh
and records are still available. States with three year statutes of
limitation include: Arizona, Arkansas, Delaware, Kansas, Louisiana,
Maryland, Mississippi, Montana, and the District of Columbia. Pennsylva-
nia has a two-year statute of limitation. In response to the now common
practice of selling time-barred debt this bill would also extinguish the
right to collect the debt after the statute of limitation has expired.

States with similar requirements include Wisconsin and Mississippi.
Debt collection actions are rife with poor service and default judgments
that are obtained after the statute of limitations have expired. To
address this problem, the bill will require that applications for
default judgments in consumer credit actions include a statement that
the creditor has reason to believe that the statute of limitations has
not expired and it will protect defendants from unknowingly waiving the
legitimate defense that a debt is past the statute of limitations or
that they were improperly served.

This legislation will benefit all consumers and for domestic violence
survivors, it will go a long way toward helping break the cycle of
violence and domestic abuse that enables perpetrators of domestic abuse
to exercise control over their victims and their finances in a manner
that prevents the victim from leaving a dangerous relationship or which
forces them to return to it.

 
LEGISLATIVE HISTORY:

2018: A.1752-A/S. 8959-A - A.Cal/S.Rules
2017: A.1752 - A. Cal.
2016: A.4438 - A. Judi
2015: A.4438 - A. Cal.
2013-14: Similar to A.9053/S.2454 - Passed Assembly/S. Judiciary
2011-12: Similar to A.633/S.677-A - Assembly Calendar/S. Judiciary
2010: A.7558-A/S. 4398-A - Passed Assembly/S. Finance
2009: A.7558-A/S .439S-A - Passed Assembly/S. Codes

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
January 1, after becoming law, and shall apply to actions and
proceedings commenced on or after such date, except that section four of
the bill shall take affect on the one hundred fiftieth day after this
act shall become law, and section thirteen of this act shall take effect
immediately.

S4827A - Bill Text download pdf


                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

    S. 4827--A                                            A. 6909--A

                       2019-2020 Regular Sessions

                      S E N A T E - A S S E M B L Y

                             March 26, 2019
                               ___________

IN  SENATE -- Introduced by Sen. THOMAS -- read twice and ordered print-
  ed, and when printed to be committed to the Committee on Judiciary  --
  committee  discharged,  bill amended, ordered reprinted as amended and
  recommitted to said committee

IN ASSEMBLY -- Introduced by M. of A. WEINSTEIN, JAFFEE, COLTON,  GALEF,
  ABINANTI,  ZEBROWSKI,  O'DONNELL,  FAHY, PEOPLES-STOKES, L. ROSENTHAL,
  M. G. MILLER, DINOWITZ,  SEAWRIGHT,  GLICK,  WEPRIN,  MOSLEY,  TAYLOR,
  BARRON  --  Multi-Sponsored  by  -- M. of A. CAHILL, COOK, CYMBROWITZ,
  EPSTEIN, GOTTFRIED, McDONOUGH, PERRY -- read once and referred to  the
  Committee  on  Judiciary  -- reported and referred to the Committee on
  Codes -- committee discharged,  bill  amended,  ordered  reprinted  as
  amended and recommitted to said committee

AN  ACT to amend the civil practice law and rules and the judiciary law,
  in relation to consumer 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".
  § 2. Section 105 of the civil practice law and  rules  is  amended  by
adding two new subdivisions (h-1) and (q-1) to read as follows:
  (H-1)  FINANCE  CHARGE.  THE  TERM  "FINANCE CHARGE" MEANS THE COST OF
CONSUMER CREDIT AS A DOLLAR AMOUNT, INCLUDES ANY CHARGE PAYABLE DIRECTLY
OR INDIRECTLY BY THE CONSUMER AND IMPOSED DIRECTLY OR INDIRECTLY BY  THE
CREDITOR  AS  AN  INCIDENT TO OR A CONDITION OF THE EXTENSION OF CREDIT,
AND DOES NOT INCLUDE ANY CHARGE OF A TYPE PAYABLE IN A  COMPARABLE  CASH
TRANSACTION.
  (Q-1) ORIGINAL CREDITOR. THE TERM "ORIGINAL CREDITOR" MEANS THE ENTITY
THAT  OWNED A CONSUMER CREDIT ACCOUNT AT THE DATE OF DEFAULT GIVING RISE
TO A CAUSE OF ACTION.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00927-07-9

S. 4827--A                          2                         A. 6909--A

  § 3. 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-H  of this article or article 2 of the uniform commer-
cial code or article 36-B of the general business law;
  § 4. The civil practice law and rules  is  amended  by  adding  a  new
section 214-h to read as follows:
  §  214-H.  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. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, WHEN THE  APPLICABLE
LIMITATIONS  PERIOD  EXPIRES,  ANY SUBSEQUENT PAYMENT TOWARD, WRITTEN OR
ORAL AFFIRMATION OF OR OTHER ACTIVITY ON THE DEBT  DOES  NOT  REVIVE  OR
EXTEND THE LIMITATIONS PERIOD.
  FOR  PURPOSES  OF  THIS SECTION, "THE RIGHT TO COLLECT CONSUMER CREDIT
DEBT" SHALL MEAN ANY ATTEMPTS BY THE CREDITOR, THIRD PARTY PURCHASER, OR
OTHER AUTHORIZED THIRD PARTY TO COLLECT SUCH  DEBT  INCLUDING,  BUT  NOT
LIMITED TO, CALLS, MAIL OR OTHER ATTEMPTS TO COLLECT.
  §  5.  The  civil  practice  law  and rules is amended by adding a new
section 306-d to read as follows:
  § 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 MAY WISH TO CONTACT AN ATTORNEY.
  YOU  SHOULD  RESPOND  TO  THE LAWSUIT AS SOON AS POSSIBLE BY FILING AN
"ANSWER" WHICH MAY BE DONE AT THE COURT CLERK'S OFFICE LISTED ABOVE.

S. 4827--A                          3                         A. 6909--A

  IF YOU DO NOT RESPOND TO THE LAWSUIT, THE  COURT  MAY  ENTER  A  MONEY
JUDGMENT  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 MAY 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.
ADDITIONAL INFORMATION CAN BE FOUND AT  THE  COURT  SYSTEM  WEBSITE  AT:
WWW.NYCOURTS.GOV
SOURCES OF INFORMATION AND ASSISTANCE:
THE  COURT  ENCOURAGES  YOU  TO  INFORM YOURSELF ABOUT YOUR OPTIONS AS A
DEFENDANT IN THIS LAWSUIT. IN ADDITION  TO  SEEKING  ASSISTANCE  FROM  A
PRIVATE  ATTORNEY  OR  LEGAL AID OFFICE, THERE ARE FREE LEGAL ASSISTANCE
PROGRAMS THAT YOU CAN USE ONLINE TO HELP YOU REPRESENT YOURSELF IN  THIS
LAWSUIT.
FOR FURTHER INFORMATION, OR TO LOCATE AN ENTITY OR PROGRAM NEAR YOU, YOU
MAY  VISIT  THE  NEW  YORK  STATE  UNIFIED COURT SYSTEM'S "RESOURCES FOR
UNREPRESENTED LITIGANTS" WEBSITE AT:
HTTP://WW2.NYCOURTS.GOV/RULES/CCR/RESOURCES.SHTML
  (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-
BLE. RECEIPT OF THE ADDITIONAL NOTICE BY THE DEFENDANT DOES  NOT  CONFER
JURISDICTION ON THE COURT IN THE ABSENCE OF PROPER SERVICE OF PROCESS.
  (D)  THE  CHIEF ADMINISTRATIVE JUDGE SHALL ISSUE A SPANISH TRANSLATION
OF THE NOTICE IN SUBDIVISION (A) OF THIS SECTION.
  § 6. 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.
  § 7. Rule 3016 of the civil practice  law  and  rules  is  amended  by
adding a new subdivision (j) to read as follows:
  (J)  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 ACCOUNT NUMBER AT THE DATE OF THE
DEFAULT GIVING RISE TO THE ACTION;

S. 4827--A                          4                         A. 6909--A

  (3) THE DATE AND AMOUNT OF THE LAST PAYMENT  OR,  IF  NO  PAYMENT  WAS
MADE, A STATEMENT THAT THE PURCHASER, BORROWER OR DEBTOR MADE NO PAYMENT
ON THE ACCOUNT;
  (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)  (A)  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.
  (B)  IF HE ACCOUNT WAS A REVOLVING CREDIT ACCOUNT PRIOR TO CHARGE OFF,
THE ITEMIZATION REQUIREMENT FOR THE BALANCE ACCRUED PRIOR TO CHARGE  OFF
SHALL BE SATISFIED BY ATTACHING THE TWELVE MONTHS OF STATEMENTS PRIOR TO
CHARGE  OFF, PROVIDED THAT ANY AMOUNT SOUGHT FOR CHARGES AND COSTS AFTER
CHARGE OFF ARE ITEMIZED AS PROVIDED FOR  IN  SUBPARAGRAPH  (A)  OF  THIS
PARAGRAPH;
  (6) (A) WHETHER THE PLAINTIFF IS THE ORIGINAL CREDITOR.
  (B) 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 FROM  THE
ORIGINAL  CREDITOR  TO  THE PLAINTIFF AND THE DATE ON WHICH THE DEBT WAS
ASSIGNED TO THAT OWNER BY THE ORIGINAL CREDITOR OR SUBSEQUENT OWNER; AND
(III) THE AMOUNT DUE AT THE TIME OF THE SALE OR ASSIGNMENT OF  THE  DEBT
BY THE ORIGINAL CREDITOR; AND
  (7)  ANY  MATTERS REQUIRED TO BE STATED WITH PARTICULARITY PURSUANT TO
RULE 3015 OF THIS ARTICLE.
  § 8. 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; 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 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 TO COLLECT A DEBT ARISING OUT OF A CONSUMER
CREDIT TRANSACTION WHERE A CONSUMER IS A DEFENDANT OR 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 WHICH, IN ANY ACTION TO COLLECT A

S. 4827--A                          5                         A. 6909--A

DEBT ARISING OUT OF A CONSUMER CREDIT TRANSACTION WHERE A CONSUMER IS  A
DEFENDANT, INCLUDES ANY AMENDED RESPONSIVE PLEADING.
  §  9.  Rule  3212  of  the  civil practice law and rules is amended by
adding a new subdivision (j) to read as follows:
  (J) ADDITIONAL NOTICE IN ANY ACTION TO COLLECT A DEBT ARISING  OUT  OF
A CONSUMER CREDIT TRANSACTION WHERE A CONSUMER IS A DEFENDANT.
  1.  AT  THE  TIME  OF SERVICE OF A NOTICE OF MOTION ANY PART OF  WHICH
REQUESTS SUMMARY JUDGMENT IN WHOLE OR IN PART, WHERE THE   MOVING  PARTY
IS  A  PLAINTIFF AND THE RESPONDENT IS A CONSUMER DEFENDANT IN AN ACTION
TO COLLECT A DEBT ARISING OUT OF A   CONSUMER  CREDIT  TRANSACTION,  AND
WHERE THE CONSUMER DEFENDANT AGAINST  WHOM SUMMARY JUDGMENT IS SOUGHT IS
NOT REPRESENTED BY AN ATTORNEY, THE PLAINTIFF SHALL SERVE, TOGETHER WITH
THE  NOTICE  OF  MOTION,  THE FOLLOWING ADDITIONAL NOTICE IN ENGLISH AND
SPANISH TO BE PRINTED IN CLEAR TYPE NO LESS THAN TWELVE-POINT IN SIZE:
                  IMPORTANT NOTICE TO PRO SE DEFENDANTS
(NAME OF COURT)
(STREET ADDRESS, ROOM NUMBER)
(CITY, STATE, ZIP CODE)

PLAINTIFF:
DEFENDANT:
INDEX NUMBER:

MOTION RETURN DATE AND TIME:

ATTENTION CPLR RULE 3212 MOTION FOR SUMMARY JUDGMENT

THIS NOTICE IS TO ADVISE YOU THAT THE PLAINTIFF IN THIS CASE HAS FILED A
MOTION FOR SUMMARY JUDGMENT AGAINST YOU  PURSUANT  TO  CPLR  RULE  3212,
WHICH  MEANS  THAT  SUMMARY  JUDGMENT WILL BE GRANTED IF THE COURT FINDS
THAT THERE IS NO GENUINE ISSUE AS TO ANY  MATERIAL  FACT  AND  THAT  THE
PLAINTIFF IS ENTITLED TO JUDGMENT AS A MATTER OF LAW.

FAILURE  TO  RESPOND TO THIS MOTION FOR SUMMARY JUDGMENT MAY RESULT IN A
MONEY JUDGMENT BEING ENTERED AGAINST YOU IN FAVOR OF THE PLAINTIFF.

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
MAY 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.

OPPOSING THIS MOTION FOR SUMMARY JUDGMENT:

IF YOU WISH TO OPPOSE THE PLAINTIFF'S REQUEST FOR JUDGMENT,  YOU  SHOULD
SET  FORTH IN A WRITTEN  RESPONSE THE REASONS THAT THE PLAINTIFF HAS NOT
SHOWN THAT IT IS ENTITLED TO JUDGMENT AS A MATTER OF LAW, AND ANY  FACTS
THAT YOU BELIEVE SHOW THAT YOU ARE NOT LIABLE TO THE PLAINTIFF OR HAVE A
DEFENSE.  YOU  SHOULD SUBMIT AFFIDAVITS OR EXHIBITS SUPPORTING ANY FACTS
THAT YOU ASSERT SHOW THAT YOU ARE NOT LIABLE OR  HAVE  A  DEFENSE.  EACH
AFFIDAVIT  SHOULD  SET  FORTH  RELEVANT  FACTS  AND SHOW THAT THE PERSON
SUBMITTING THE AFFIDAVIT HAS PERSONAL KNOWLEDGE OF THOSE FACTS.  IF  YOU
RELY ON  EXHIBITS, YOU SHOULD ATTACH COPIES OF THEM TO AN AFFIDAVIT THAT
EXPLAINS WHAT THEY ARE AND HOW THEY SHOW THAT YOU ARE NOT LIABLE OR HAVE
A  DEFENSE.  YOU  SHOULD  BRING YOUR OPPOSITION PAPERS   TO COURT ON THE

S. 4827--A                          6                         A. 6909--A

COURT DATE AND MAIL A COPY TO THE PLAINTIFF'S ATTORNEY IN ADVANCE OF THE
COURT DATE. YOU SHOULD ALSO ATTEND COURT ON THE RETURN DATE.

SOURCES OF INFORMATION AND ASSISTANCE:

THE  COURT  ENCOURAGES  YOU  TO  INFORM YOURSELF ABOUT YOUR OPTIONS AS A
DEFENDANT IN THIS LAWSUIT.   IN ADDITION TO SEEKING  ASSISTANCE  FROM  A
PRIVATE  ATTORNEY  OR LEGAL AID OFFICE, THERE MAY BE FREE  LEGAL ASSIST-
ANCE PROGRAMS THAT YOU MAY CONTACT FOR HELP IN REPRESENTING YOURSELF  IN
THIS LAWSUIT.

FOR FURTHER INFORMATION, OR TO LOCATE AN ENTITY OR PROGRAM NEAR YOU, YOU
MAY  VISIT  THE  NEW  YORK  STATE  UNIFIED COURT SYSTEM'S "RESOURCES FOR
UNREPRESENTED LITIGANTS" WEBSITE AT:
HTTP://WW2.NYCOURTS.GOV/RULES/CCR/RESOURCES.SHTML
  2. THE PLAINTIFF SEEKING SUMMARY JUDGMENT SHALL FILE PROOF OF  SERVICE
OF  THE  ADDITIONAL NOTICE  WITH THE COURT, AND NO MOTION FOR WHICH THIS
ADDITIONAL NOTICE IS REQUIRED SHALL BE GRANTED   UNLESS  SUCH  PROOF  OF
SERVICE HAS BEEN FILED.
  3. THE CHIEF ADMINISTRATIVE JUDGE SHALL ISSUE A SPANISH TRANSLATION OF
THE NOTICE IN PARAGRAPH ONE OF THIS SUBDIVISION.
  §  10. Section 3213 of the civil practice law and rules, as amended by
chapter 210 of the laws of 1969, is amended to read as follows:
  § 3213. Motion for summary judgment in  lieu  of  complaint.  When  an
action is based upon an instrument for the payment of money only or upon
any  judgment,  the  plaintiff  may  serve  with the summons a notice of
motion for summary judgment and the  supporting  papers  in  lieu  of  a
complaint.  The summons served with such motion papers shall require the
defendant to submit answering papers  on  the  motion  within  the  time
provided  in the notice of motion. The minimum time such motion shall be
noticed to be heard shall be as provided by subdivision (a) of rule  320
for  making  an appearance, depending upon the method of service. If the
plaintiff sets the hearing date of the motion  later  than  the  minimum
time  therefor,  he  may  require  the  defendant to serve a copy of his
answering papers upon him within  such  extended  period  of  time,  not
exceeding  ten days, prior to such hearing date. No default judgment may
be entered pursuant to subdivision (a) of  section  3215  prior  to  the
hearing  date  of  the  motion.  If the motion is denied, the moving and
answering papers shall be deemed the complaint and answer, respectively,
unless the court orders otherwise. THE  ADDITIONAL  NOTICE  REQUIRED  BY
SUBDIVISION (J) OF RULE 3212 SHALL BE APPLICABLE TO A MOTION MADE PURSU-
ANT  TO  THIS  SECTION  IN ANY ACTION TO COLLECT A DEBT ARISING OUT OF A
CONSUMER CREDIT TRANSACTION WHERE A CONSUMER IS A DEFENDANT.
  § 11. 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;

S. 4827--A                          7                         A. 6909--A

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. THE CHIEF ADMINISTRATIVE JUDGE SHALL
ISSUE FORM AFFIDAVITS TO SATISFY THE REQUIREMENTS  OF  THIS  SUBDIVISION
FOR  CONSUMER  CREDIT  TRANSACTIONS.  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) AFFIDAVIT. A REQUEST FOR A DEFAULT JUDGMENT ENTERED BY THE  CLERK,
MUST  BE  ACCOMPANIED  BY  AN  AFFIDAVIT BY THE PLAINTIFF OR PLAINTIFF'S
ATTORNEY STATING THAT AFTER REASONABLE INQUIRY, HE OR SHE HAS REASON  TO
BELIEVE THAT THE STATUTE OF LIMITATIONS HAS NOT EXPIRED.
  §  12.  The  civil  practice  law and rules is amended by adding a new
section 7516 to read as follows:
  § 7516. 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
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.
  §  13. Subdivision 2 of section 212 of the judiciary law is amended by
adding a new paragraph (aa) to read as follows:
  (AA) NOT LATER THAN JANUARY FIRST, TWO THOUSAND TWENTY, MAKE AVAILABLE
SPANISH TRANSLATIONS OF THE ADDITIONAL NOTICES IN CONSUMER CREDIT TRANS-
ACTION ACTIONS AND PROCEEDINGS REQUIRED BY SECTION 306-D  OF  THE  CIVIL
PRACTICE  LAW  AND  RULES  AND SUBDIVISION (I) OF RULE 3212 OF THE CIVIL
PRACTICE LAW AND RULES, AND MAKE AVAILABLE FORM AFFIDAVITS REQUIRED  FOR
A MOTION FOR DEFAULT JUDGMENT IN A CONSUMER CREDIT TRANSACTION ACTION OR
PROCEEDING  REQUIRED  BY  SUBDIVISION  (F)  OF SECTION 3215 OF THE CIVIL
PRACTICE LAW AND RULES.
  § 14. This act shall take effect immediately; provided, however,  that
sections  two,  three,  five,  six,  seven, eight, nine, ten, eleven and
twelve shall take effect on the first of  January  next  succeeding  the
date  on which it shall have become a law and shall apply to actions and
proceedings commenced on or after such date; and provided, further, that
section four of this act shall take effect on the one  hundred  fiftieth
day after this act shall have become a law.

Co-Sponsors

S4827B - Details

See Assembly Version of this Bill:: A6909
Current Committee:: Senate Judiciary
Law Section:: Civil Practice Law and Rules
Laws Affected:: Amd CPLR, generally; amd §212, Judy L
Versions Introduced in Other Legislative Sessions:: 2013-2014: A2678
2015-2016: A3877, A4438
2017-2018: S8959, A1752
2021-2022: S153, A2382

S4827B - Summary

S4827B - Sponsor Memo

 
BILL NUMBER: S4827B

SPONSOR: THOMAS
 
TITLE OF BILL:  An act to amend the civil practice law and rules and
the judiciary law, in relation to consumer credit transactions

 
PURPOSE OF BILL:

This bill would strengthen consumer protections in consumer debt
collection proceedings.

 
SUMMARY OF PROVISIONS OF BILL:

The bill would require that the complaint in consumer credit actions
provide the name of the original creditor, the last four digits of the
original account number, the date and amount of the last payment, a
chain of title of the account, and a breakdown of the amount that the
plaintiff seeks to collect. The bill also requires that a copy of the
contract be attached to the complaint.

The bill would reduce the statute of limitations on consumer credit

actions from six years to three years. The bill would also bar debt
collectors from collecting debts on which the statute of limitations has
expired.

It would require that an additional notice, of a pending consumer credit
action be mailed to the defendant by the clerk of the court.  This is
required in New York City and the bill would adopt this requirement
statewide. The chief administrative judge would be required to make
available Spanish translations of said additional notices.

The bill would permit defendants in consumer credit actions to raise
improper service as a defense in their answer and preserve that defense
for trial without having to file a separate motion to dismiss within 60
days as under current law.

To prevent the entry of default judgments on claims which have no merit,
the bill would require applications for default judgments in consumer
credit actions to include specific pleading requirements.  These include

(1) an affidavit by the original creditor of the facts constituting the
debt, the default in payment, the sale or assignment 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 plaintiffs witness. The bill will also require that appli-
cations for default judgments in consumer credit actions include a
statement that after reasonable inquiry, the creditor has reason to
believe that the statute of limitations has not expired.  Finally, the
chief administrative judge would be required to issue form affidavits
for default motions based upon consumer credit transactions, which would
standardize and make uniform the motion disposition process for the
courts.

 
JUSTIFICATION:

There have been serious concerns reported about the growing problem of
abusive debt collection practices including filing suit on debts that
are too old to be sued on, are a result of identity theft or are debts
that have been paid or otherwise discharged. Other reported concerns
include lack of notice to the defendant of the law suit resulting in a
default judgment against the defendant without a requirement to produce
proof of the debt sued on.

Abusive debt collection lawsuits exploit current gaps in our state's
civil procedure laws and rules. The proposed legislation helps to fill
those gaps. In doing so, this legislation will protect all consumers,
and will particularly help ameliorate some of the forms of economic
abuse, including identity theft, suffered by domestic violence victims
at the hands of their abusers.

At a hearing on economic abuse as a form of domestic abuse, held on
December 5, 2012, by the New York State Assembly Committees on Judiciary
and Codes, civil legal service providers, domestic violence prevention
advocates and the Office of Court Administration highlighted the insid-
ious and pervasive nature of various forms of economic abuse perpetrated
by abusers in the family violence context to exercise power and control
over their victims and their finances. The types of abuse cited included
incurring debt in the survivor's name through false statements or coer-
cion, perpetrating identity theft or otherwise incurring debt without
the survivor's knowledge.

Witnesses at the hearing cited this legislation as important and helpful
to ameliorating economic abuse suffered by domestic abuse survivors.

This legislation requires statewide institution of additional notice
requirements that are presently in place in New York City. There is a
significant and documented problem with faulty service that results in
default judgments with serious life-altering ramifications.  Without
notice, defendants do not appear in court, and debt buyers easily obtain
default judgments. These judgments are enforced by freezing people's
bank accounts and garnishing their wages, hampering their ability to
then pay for basic necessities such as food, utilities, medication and
housing. These judgments appear on people's credit reports, making it
close to impossible for them to secure housing or employment, or to take
out a loan. The provisions of this bill would protect all consumers and
domestic abuse survivor s in particular, by ensuring that New Yorkers
receive actual notice of debt collection actions.

To ensure that default judgment applications in debt collection lawsuits
are evaluated on the merits, this bill also requires court papers to
include more information about the debt sued upon. This would ensure
that all New Yorkers will be better able to identify the debt or account
on which they are being sued. There are many debts that result from
identity theft or mistaken identity and, in other situations the defend-
ant may not recognize the debt as theirs from the minimal information
provided on the initial filing of legal papers and may therefore not
respond. We learned from the hearing on economic abuse as a form of
domestic abuse, that this legislation will be particularly important for
domestic violence survivors as it will help them identify the debt and
assert defenses in cases involving debts they did not voluntarily incur
but that were incurred by their abusers in the survivor's name.


This legislation will reduce the statute of limitations for consumer
credit actions from six to three years. Reducing the statute of limita-
tions requires creditors to file their claims while memories are fresh
and records are still available. States with three year statutes of
limitation include: Arizona, Arkansas, Delaware, Kansas, Louisiana,
Maryland, Mississippi, Montana, and the District of Columbia.  Pennsyl-
vania has a two-year statute of limitation. In response to the now
common practice of selling time-barred debt this bill would also extin-
guish the right to collect the debt after the statute of limitation has
expired.

States with similar requirements include Wisconsin and Mississippi.
Debt collection actions are rife with poor service and default judgments
that are obtained after the statute of limitations have expired. To
address this problem, the bill will require that applications for
default judgments in consumer credit actions include a statement that
the creditor has reason to believe that the statute of limitations has
not expired and it will protect defendants from unknowingly waiving the
legitimate defense that a debt is past the statute of limitations or
that they were improperly served.

This legislation will benefit all consumers and for domestic violence
survivors, it will go a long way toward helping break the cycle of
violence and domestic abuse that enables perpetrators of domestic abuse
to exercise control over their victims and their finances in a manner
that prevents the victim from leaving a dangerous relationship or which
forces them to return to it.

 
LEGISLATIVE HISTORY:

2018: A.1752-A/S. 8959-A - A.Cal/S.Rules
2017: A.1752 - A. Cal.
2016: A.4438 - A. Judi
2015: A.4438 - A. Cal.
2013-14: Similar to A.9053/S.2454 - Passed Assembly/S. Judiciary
2011-12: Similar to A.633/S.677-A - Assembly Calendar/S. Judiciary
2010: A.7558-A/S. 4398-A - Passed Assembly/S. Finance
2009: A.7558-A/S .439S-A - Passed Assembly/S. Codes

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
January 1, after becoming law, and shall apply to actions and
proceedings commenced on or after such date, except that section four of
the bill shall take affect on the one hundred fiftieth day after this
act shall become law, and section thirteen of this act shall take effect
immediately.

S4827B - Bill Text download pdf


                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

    S. 4827--B                                            A. 6909--B

                       2019-2020 Regular Sessions

                      S E N A T E - A S S E M B L Y

                             March 26, 2019
                               ___________

IN  SENATE -- Introduced by Sen. THOMAS -- read twice and ordered print-
  ed, and when printed to be committed to the Committee on Judiciary  --
  committee  discharged,  bill amended, ordered reprinted as amended and
  recommitted to said committee -- committee discharged,  bill  amended,
  ordered reprinted as amended and recommitted to said committee

IN  ASSEMBLY -- Introduced by M. of A. WEINSTEIN, JAFFEE, COLTON, GALEF,
  ABINANTI, ZEBROWSKI, O'DONNELL,  FAHY,  PEOPLES-STOKES,  L. ROSENTHAL,
  M. G. MILLER,  DINOWITZ,  SEAWRIGHT,  GLICK,  WEPRIN,  MOSLEY, TAYLOR,
  BARRON -- Multi-Sponsored by -- M. of  A.  CAHILL,  COOK,  CYMBROWITZ,
  EPSTEIN,  GOTTFRIED, McDONOUGH, PERRY -- read once and referred to the
  Committee on Judiciary -- reported and referred to  the  Committee  on
  Codes  --  committee  discharged,  bill  amended, ordered reprinted as
  amended and recommitted to said committee -- reported and referred  to
  the  Committee  on  Rules -- Rules Committee discharged, bill amended,
  ordered reprinted as amended and recommitted to the Committee on Rules

AN ACT to amend the civil practice law and rules and the judiciary  law,
  in relation to consumer 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".
  §  2.  Section  105  of the civil practice law and rules is amended by
adding two new subdivisions (h-1) and (q-1) to read as follows:
  (H-1) FINANCE CHARGE. THE TERM "FINANCE  CHARGE"  MEANS  THE  COST  OF
CONSUMER CREDIT AS A DOLLAR AMOUNT, INCLUDES ANY CHARGE PAYABLE DIRECTLY
OR  INDIRECTLY BY THE CONSUMER AND IMPOSED DIRECTLY OR INDIRECTLY BY THE
CREDITOR AS AN INCIDENT TO OR A CONDITION OF THE  EXTENSION  OF  CREDIT,
AND  DOES  NOT INCLUDE ANY CHARGE OF A TYPE PAYABLE IN A COMPARABLE CASH
TRANSACTION.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00927-09-9

S. 4827--B                          2                         A. 6909--B

  (Q-1) ORIGINAL CREDITOR. THE TERM "ORIGINAL CREDITOR" MEANS THE ENTITY
THAT OWNED A CONSUMER CREDIT ACCOUNT AT THE DATE OF DEFAULT GIVING  RISE
TO A CAUSE OF ACTION.
  § 3. 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-H of this article or article 2 of the  uniform  commer-
cial code or article 36-B of the general business law;
  §  4.  The  civil  practice  law  and rules is amended by adding a new
section 214-h to read as follows:
  § 214-H. 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.  NOTWITHSTANDING ANY OTHER PROVISION OF LAW, WHEN THE APPLICABLE
LIMITATIONS PERIOD EXPIRES, ANY SUBSEQUENT PAYMENT  TOWARD,  WRITTEN  OR
ORAL  AFFIRMATION  OF  OR  OTHER ACTIVITY ON THE DEBT DOES NOT REVIVE OR
EXTEND THE LIMITATIONS PERIOD.
  FOR PURPOSES OF THIS SECTION, "THE RIGHT TO  COLLECT  CONSUMER  CREDIT
DEBT" SHALL MEAN ANY ATTEMPTS BY THE CREDITOR, THIRD PARTY PURCHASER, OR
OTHER  AUTHORIZED  THIRD  PARTY  TO COLLECT SUCH DEBT INCLUDING, BUT NOT
LIMITED TO, CALLS, MAIL OR OTHER ATTEMPTS TO COLLECT.
  § 5. The civil practice law and rules  is  amended  by  adding  a  new
section 306-d to read as follows:
  §  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 MAY WISH TO CONTACT AN ATTORNEY.

S. 4827--B                          3                         A. 6909--B

  YOU SHOULD RESPOND TO THE LAWSUIT AS SOON AS  POSSIBLE  BY  FILING  AN
"ANSWER" WHICH MAY BE DONE AT THE COURT CLERK'S OFFICE LISTED ABOVE.
  IF  YOU  DO  NOT  RESPOND  TO THE LAWSUIT, THE COURT MAY ENTER A MONEY
JUDGMENT 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 MAY 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.
ADDITIONAL INFORMATION CAN BE FOUND AT  THE  COURT  SYSTEM  WEBSITE  AT:
WWW.NYCOURTS.GOV
SOURCES OF INFORMATION AND ASSISTANCE:
THE  COURT  ENCOURAGES  YOU  TO  INFORM YOURSELF ABOUT YOUR OPTIONS AS A
DEFENDANT IN THIS LAWSUIT. IN ADDITION  TO  SEEKING  ASSISTANCE  FROM  A
PRIVATE  ATTORNEY  OR  LEGAL AID OFFICE, THERE ARE FREE LEGAL ASSISTANCE
PROGRAMS THAT YOU CAN USE ONLINE TO HELP YOU REPRESENT YOURSELF IN  THIS
LAWSUIT.
FOR FURTHER INFORMATION, OR TO LOCATE AN ENTITY OR PROGRAM NEAR YOU, YOU
MAY  VISIT  THE  NEW  YORK  STATE  UNIFIED COURT SYSTEM'S "RESOURCES FOR
UNREPRESENTED LITIGANTS" WEBSITE AT:
HTTP://WW2.NYCOURTS.GOV/RULES/CCR/RESOURCES.SHTML
  (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-
BLE. RECEIPT OF THE ADDITIONAL NOTICE BY THE DEFENDANT DOES  NOT  CONFER
JURISDICTION ON THE COURT IN THE ABSENCE OF PROPER SERVICE OF PROCESS.
  (D)  THE  CHIEF ADMINISTRATIVE JUDGE SHALL ISSUE A SPANISH TRANSLATION
OF THE NOTICE IN SUBDIVISION (A) OF THIS SECTION.
  § 6. 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.
  § 7. Rule 3016 of the civil practice  law  and  rules  is  amended  by
adding a new subdivision (j) to read as follows:
  (J)  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;

S. 4827--B                          4                         A. 6909--B

  (2)  THE  LAST  FOUR  DIGITS  OF THE ACCOUNT NUMBER AT THE DATE OF THE
DEFAULT GIVING RISE TO A CAUSE OF ACTION;
  (3)  THE  DATE  AND  AMOUNT  OF THE LAST PAYMENT OR, IF NO PAYMENT WAS
MADE, A STATEMENT THAT THE PURCHASER, BORROWER OR DEBTOR MADE NO PAYMENT
ON THE ACCOUNT;
  (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) (A) EXCEPT AS PROVIDED IN SUBPARAGRAPH (B) OF THIS  PARAGRAPH,  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.
  (B)  IF  THE ACCOUNT WAS A REVOLVING CREDIT ACCOUNT, AN ITEMIZATION OF
THE AMOUNT SOUGHT, BY (I) THE BALANCE  AT  THE  DATE  OF  DEFAULT;  (II)
INTEREST,  FEES  AND  CHARGES  IMPOSED  AFTER THE DATE OF DEFAULT; (III)
CREDITS OR PAYMENTS MADE BY OR ON BEHALF OF THE PURCHASER,  BORROWER  OR
DEBTOR  AFTER  THE  DATE OF DEFAULT; AND (IV) IF APPLICABLE, THE DATE OF
CHARGE OFF AND BALANCE AT CHARGE OFF, PROVIDED THAT  ANY  AMOUNT  SOUGHT
FOR  CHARGES  AND COSTS AFTER CHARGE OFF ARE ITEMIZED AS PROVIDED FOR IN
SUBPARAGRAPH (A) OF THIS PARAGRAPH;
  (6) (A) WHETHER THE PLAINTIFF IS THE ORIGINAL CREDITOR.
  (B) 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 FROM THE
ORIGINAL CREDITOR TO THE PLAINTIFF AND THE DATE ON WHICH  THE  DEBT  WAS
ASSIGNED TO THAT OWNER BY THE ORIGINAL CREDITOR OR SUBSEQUENT OWNER; AND
(III)  THE  AMOUNT DUE AT THE TIME OF THE SALE OR ASSIGNMENT OF THE DEBT
BY THE ORIGINAL CREDITOR; AND
  (7) ANY MATTERS REQUIRED TO BE STATED WITH PARTICULARITY  PURSUANT  TO
RULE 3015 OF THIS ARTICLE.
  § 8. 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; 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 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 TO COLLECT A DEBT ARISING OUT OF A  CONSUMER
CREDIT  TRANSACTION WHERE A CONSUMER IS A DEFENDANT OR 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

S. 4827--B                          5                         A. 6909--B

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 WHICH, IN ANY ACTION TO COLLECT A
DEBT ARISING OUT OF A CONSUMER CREDIT TRANSACTION WHERE A CONSUMER IS  A
DEFENDANT, INCLUDES ANY AMENDED RESPONSIVE PLEADING.
  §  9.  Rule  3212  of  the  civil practice law and rules is amended by
adding a new subdivision (j) to read as follows:
  (J) ADDITIONAL NOTICE IN ANY ACTION TO COLLECT A DEBT ARISING  OUT  OF
A CONSUMER CREDIT TRANSACTION WHERE A CONSUMER IS A DEFENDANT.
  1.  AT  THE  TIME  OF SERVICE OF A NOTICE OF MOTION ANY PART OF  WHICH
REQUESTS SUMMARY JUDGMENT IN WHOLE OR IN PART, WHERE THE   MOVING  PARTY
IS  A  PLAINTIFF AND THE RESPONDENT IS A CONSUMER DEFENDANT IN AN ACTION
TO COLLECT A DEBT ARISING OUT OF A   CONSUMER  CREDIT  TRANSACTION,  AND
WHERE THE CONSUMER DEFENDANT AGAINST  WHOM SUMMARY JUDGMENT IS SOUGHT IS
NOT REPRESENTED BY AN ATTORNEY, THE PLAINTIFF SHALL SERVE, TOGETHER WITH
THE  NOTICE  OF  MOTION,  THE FOLLOWING ADDITIONAL NOTICE IN ENGLISH AND
SPANISH TO BE PRINTED IN CLEAR TYPE NO LESS THAN TWELVE-POINT IN SIZE:
                  IMPORTANT NOTICE TO PRO SE DEFENDANTS
(NAME OF COURT)
(STREET ADDRESS, ROOM NUMBER)
(CITY, STATE, ZIP CODE)

PLAINTIFF:
DEFENDANT:
INDEX NUMBER:

MOTION RETURN DATE AND TIME:

ATTENTION CPLR RULE 3212 MOTION FOR SUMMARY JUDGMENT

THIS NOTICE IS TO ADVISE YOU THAT THE PLAINTIFF IN THIS CASE HAS FILED A
MOTION FOR SUMMARY JUDGMENT AGAINST YOU  PURSUANT  TO  CPLR  RULE  3212,
WHICH  MEANS  THAT  SUMMARY  JUDGMENT WILL BE GRANTED IF THE COURT FINDS
THAT THERE IS NO GENUINE ISSUE AS TO ANY  MATERIAL  FACT  AND  THAT  THE
PLAINTIFF IS ENTITLED TO JUDGMENT AS A MATTER OF LAW.

FAILURE  TO  RESPOND TO THIS MOTION FOR SUMMARY JUDGMENT MAY RESULT IN A
MONEY JUDGMENT BEING ENTERED AGAINST YOU IN FAVOR OF THE PLAINTIFF.

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
MAY 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.

OPPOSING THIS MOTION FOR SUMMARY JUDGMENT:

IF YOU WISH TO OPPOSE THE PLAINTIFF'S REQUEST FOR JUDGMENT,  YOU  SHOULD
SET  FORTH IN A WRITTEN  RESPONSE THE REASONS THAT THE PLAINTIFF HAS NOT
SHOWN THAT IT IS ENTITLED TO JUDGMENT AS A MATTER OF LAW, AND ANY  FACTS
THAT YOU BELIEVE SHOW THAT YOU ARE NOT LIABLE TO THE PLAINTIFF OR HAVE A
DEFENSE.  YOU  SHOULD SUBMIT AFFIDAVITS OR EXHIBITS SUPPORTING ANY FACTS
THAT YOU ASSERT SHOW THAT YOU ARE NOT LIABLE OR  HAVE  A  DEFENSE.  EACH
AFFIDAVIT  SHOULD  SET  FORTH  RELEVANT  FACTS  AND SHOW THAT THE PERSON

S. 4827--B                          6                         A. 6909--B

SUBMITTING THE AFFIDAVIT HAS PERSONAL KNOWLEDGE OF THOSE FACTS.  IF  YOU
RELY ON  EXHIBITS, YOU SHOULD ATTACH COPIES OF THEM TO AN AFFIDAVIT THAT
EXPLAINS WHAT THEY ARE AND HOW THEY SHOW THAT YOU ARE NOT LIABLE OR HAVE
A  DEFENSE.  YOU  SHOULD  BRING YOUR OPPOSITION PAPERS   TO COURT ON THE
COURT DATE AND MAIL A COPY TO THE PLAINTIFF'S ATTORNEY IN ADVANCE OF THE
COURT DATE. YOU SHOULD ALSO ATTEND COURT ON THE RETURN DATE.

SOURCES OF INFORMATION AND ASSISTANCE:

THE COURT ENCOURAGES YOU TO INFORM YOURSELF  ABOUT  YOUR  OPTIONS  AS  A
DEFENDANT  IN  THIS  LAWSUIT.   IN ADDITION TO SEEKING ASSISTANCE FROM A
PRIVATE ATTORNEY OR LEGAL AID OFFICE, THERE MAY BE FREE   LEGAL  ASSIST-
ANCE  PROGRAMS THAT YOU MAY CONTACT FOR HELP IN REPRESENTING YOURSELF IN
THIS LAWSUIT.

FOR FURTHER INFORMATION, OR TO LOCATE AN ENTITY OR PROGRAM NEAR YOU, YOU
MAY VISIT THE NEW YORK  STATE  UNIFIED  COURT  SYSTEM'S  "RESOURCES  FOR
UNREPRESENTED LITIGANTS" WEBSITE AT:
HTTP://WW2.NYCOURTS.GOV/RULES/CCR/RESOURCES.SHTML
  2.  THE PLAINTIFF SEEKING SUMMARY JUDGMENT SHALL FILE PROOF OF SERVICE
OF THE ADDITIONAL NOTICE  WITH THE COURT, AND NO MOTION FOR  WHICH  THIS
ADDITIONAL  NOTICE  IS  REQUIRED SHALL BE GRANTED   UNLESS SUCH PROOF OF
SERVICE HAS BEEN FILED.
  3. THE CHIEF ADMINISTRATIVE JUDGE SHALL ISSUE A SPANISH TRANSLATION OF
THE NOTICE IN PARAGRAPH ONE OF THIS SUBDIVISION.
  § 10. Section 3213 of the civil practice law and rules, as amended  by
chapter 210 of the laws of 1969, is amended to read as follows:
  §  3213.  Motion  for  summary  judgment in lieu of complaint. When an
action is based upon an instrument for the payment of money only or upon
any judgment, the plaintiff may serve  with  the  summons  a  notice  of
motion  for  summary  judgment  and  the  supporting papers in lieu of a
complaint. The summons served with such motion papers shall require  the
defendant  to  submit  answering  papers  on  the motion within the time
provided in the notice of motion. The minimum time such motion shall  be
noticed  to be heard shall be as provided by subdivision (a) of rule 320
for making an appearance, depending upon the method of service.  If  the
plaintiff  sets  the  hearing  date of the motion later than the minimum
time therefor, he may require the defendant  to  serve  a  copy  of  his
answering  papers  upon  him  within  such  extended period of time, not
exceeding ten days, prior to such hearing date. No default judgment  may
be  entered  pursuant  to  subdivision  (a) of section 3215 prior to the
hearing date of the motion. If the motion  is  denied,  the  moving  and
answering papers shall be deemed the complaint and answer, respectively,
unless  the  court  orders  otherwise. THE ADDITIONAL NOTICE REQUIRED BY
SUBDIVISION (J) OF RULE 3212 SHALL BE APPLICABLE TO A MOTION MADE PURSU-
ANT TO THIS SECTION IN ANY ACTION TO COLLECT A DEBT  ARISING  OUT  OF  A
CONSUMER CREDIT TRANSACTION WHERE A CONSUMER IS A DEFENDANT.
  §  11.  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-

S. 4827--B                          7                         A. 6909--B

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. THE CHIEF ADMINISTRATIVE  JUDGE  SHALL
ISSUE  FORM  AFFIDAVITS  TO SATISFY THE REQUIREMENTS OF THIS SUBDIVISION
FOR CONSUMER CREDIT TRANSACTIONS.  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)  AFFIDAVIT. A REQUEST FOR A DEFAULT JUDGMENT ENTERED BY THE CLERK,
MUST BE ACCOMPANIED BY AN AFFIDAVIT  BY  THE  PLAINTIFF  OR  PLAINTIFF'S
ATTORNEY  STATING THAT AFTER REASONABLE INQUIRY, HE OR SHE HAS REASON TO
BELIEVE THAT THE STATUTE OF LIMITATIONS HAS NOT EXPIRED.
  § 12. The civil practice law and rules is  amended  by  adding  a  new
section 7516 to read as follows:
  §  7516.  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
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.
  § 13. Subdivision 2 of section 212 of the judiciary law is amended  by
adding a new paragraph (aa) to read as follows:
  (AA) NOT LATER THAN JANUARY FIRST, TWO THOUSAND TWENTY, MAKE AVAILABLE
SPANISH TRANSLATIONS OF THE ADDITIONAL NOTICES IN CONSUMER CREDIT TRANS-
ACTION  ACTIONS  AND  PROCEEDINGS REQUIRED BY SECTION 306-D OF THE CIVIL
PRACTICE LAW AND RULES AND SUBDIVISION (I) OF RULE  3212  OF  THE  CIVIL
PRACTICE  LAW AND RULES, AND MAKE AVAILABLE FORM AFFIDAVITS REQUIRED FOR
A MOTION FOR DEFAULT JUDGMENT IN A CONSUMER CREDIT TRANSACTION ACTION OR
PROCEEDING REQUIRED BY SUBDIVISION (F) OF  SECTION  3215  OF  THE  CIVIL
PRACTICE LAW AND RULES.
  §  14. This act shall take effect immediately; provided, however, that
sections two, three, five, six, seven,  eight,  nine,  ten,  eleven  and
twelve  shall  take  effect  on the first of January next succeeding the
date on which it shall have become a law and shall apply to actions  and

S. 4827--B                          8                         A. 6909--B

proceedings commenced on or after such date; and provided, further, that
section  four  of this act shall take effect on the one hundred fiftieth
day after this act shall have become a law.

Co-Sponsors

S4827C - Details

See Assembly Version of this Bill:: A6909
Current Committee:: Senate Judiciary
Law Section:: Civil Practice Law and Rules
Laws Affected:: Amd CPLR, generally; amd §212, Judy L
Versions Introduced in Other Legislative Sessions:: 2013-2014: A2678
2015-2016: A3877, A4438
2017-2018: S8959, A1752
2021-2022: S153, A2382

S4827C - Summary

S4827C - Sponsor Memo

 
BILL NUMBER: S4827c

SPONSOR: THOMAS
 
TITLE OF BILL:

An act to amend the civil practice law and rules and the judiciary law,
in relation to consumer credit transactions

 
PURPOSE OF BILL:

This bill would strengthen consumer protections in consumer debt
collection proceedings.

 
SUMMARY OF PROVISIONS OF BILL:

The bill would amend pleading requirements particular to consumer credit
actions by requiring that the complaint provide the name of the original
creditor, the last four digits of the account number printed on the most
recent monthly statement recording a purchase transaction, last payment,
or balance transfer, the date and amount of the last payment, an itemi-
zation of the amount sought, the account balance printed on the most

recent monthly statement recording a purchase transaction, last payment,
or balance transfer, and whether the plaintiff is the original creditor,
and if not, information about the sale and assignment of the debt. The
bill also requires that a copy of the contract or other written instru-
ment on which the action is based be attached to the complaint.

The bill would reduce the statute of limitations on consumer credit
actions from six years to three years.

The bill would permit defendants in consumer credit actions to raise
improper service as a defense in their answer and preserve that defense
for trial without having to file a separate motion to dismiss within 60
days as under current law.

It would require that an additional notice of a pending consumer credit
action be mailed to the defendant by the clerk of the court, with the
notice and mailing envelope provided by the plaintiff. This notice would
provide important information to the consumer credit defendant, includ-
ing the website address for consumer credit resources maintained by the
New York State Office of Court Administration. The chief administrative
judge would be required to make available Spanish translations of said
additional notices.

Similar in concept to the notice provided to the consumer upon commence-
ment of the action, the bill would require an additional notice advising
defendants in consumer credit actions against whom a summary judgment
motion has been made of the significance and consequence of such a
motion, and how to respond. It would also include the website address
for consumer credit resources maintained by the New York State Office of
Court Administration to assist consumer credit defendants in responding
to such motions.

To prevent the entry of default judgments on claims that lack merit, the
bill would require applications for default judgments in consumer credit
actions to conform with specific requirements. These include (1) an
affidavit by the original creditor of the facts constituting the debt,
the default in payment, the sale or assignment 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 entity, 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 plaintiff, which includes a chain
of title of the debt, completed by the plaintiff or plaintiff's witness.
The bill will also require that applications for default judg- ments in
consumer credit actions include a statement that after reason- able
inquiry, the plaintiff or its attorney has reason to believe that the
statute of limitations has not expired. Finally, the chief administra-
tive judge would be required to issue form affidavits for default
motions based upon consumer credit transactions, which would standardize
and make uniform the motion disposition process for the courts.

Finally, the bill would provide similarly exacting requirements for
consumer creditors who seek to enter judgment based upon an arbitration
award.

 
JUSTIFICATION:

There have been serious concerns reported about the growing problem of
abusive debt collection practices, including filing suit on debts that
are too old to be sued on, are a result of identity theft or are debts
that have been paid or otherwise discharged. Original creditors, such as
credit card issuers, routinely sell large portfolios of consumer debt
accounts to debt buyers, who regularly re-sell the debts.  Minimal
information or documentation is transferred to debt purchasers. The
process makes it difficult for a consumer to identify the debt, the
current owner, or amount claimed and results in collection efforts that
continue for years, including lawsuits filed after the statute of limi-
tations has expired. There have been instances in which a consumer paid
a debt, but was later contacted by another debt buyer attempting to
collect it. Other reported concerns include lack of notice to the
defendant of the law suit resulting in a default judgment against the
defendant without a requirement to produce proof of the debt sued on.
These default judgments are collected through wage garnishment and bank
account restraints, which is often the first time a consumer learns that
they were sued. Stopping garnishment and unfreezing bank accounts
requires that the consumer take action in court, but rarely do consumers
have attorneys to help.  It is especially burdensome given the limita-
tions on daily life and the health challenges related to the COVID-19
pandemic.

The devastating toll that abusive debt collection lawsuits take on
consumers is a longstanding and persistent problem identified by numer-
ous governmental and public policy institutions up through this day. In
its 2010 report, Repairing A Broken System: Protecting Consumers in Debt
Collection Litigation and Arbitration. the Federal Trade Commission
recommended state-level reforms similar to those contained in this bill.
In 2016, Human Rights Watch made similar recommendations in a study
called Rubber Stamp Justice, which incorporated data supplied by the New
York court system. Most recently, in May 2020 The PEW Charitable Trusts
issued How Debt Collectors Are Transforming the Business of State
Courts, which noted, among many other things: "Debt collection lawsuits
that end in default judgment can have lasting consequences for consum-
ers' economic stability."(Page 17.) PEW also recommended a review of
state policies to ensure that both sides can effectively present their
cases. This bill responds to these calls for better delivery of justice
to consumer defendants.

Abusive debt collection lawsuits exploit current gaps in our State's
civil procedure laws and rules. The proposed legislation helps to fill
those gaps. In doing so, this legislation will protect all consumers,
and will particularly help ameliorate some of the forms of economic
abuse, including identity theft, suffered by domestic violence victims
at the hands of their abusers.

At a hearing on economic abuse as a form of domestic abuse, held on
December 5, 2012, by the New York State Assembly Committees on Judiciary
and Codes, civil legal service providers, domestic violence prevention
advocates and the Office of Court Administration highlighted the insid-
ious and pervasive nature of various forms of economic abuse perpetrated
by abusers in the family violence context to exercise power and control
over their victims and their finances. The types of abuse cited included
incurring debt in the survivor's name through false statements or coer-
cion, perpetrating identity theft or otherwise incurring debt without
the survivor's knowledge. Witnesses at the hearing cited this legis-
lation as important and helpful to meliorating economic abuse suffered
by domestic abuse survivors.

This legislation requires statewide institution of additional notice
requirements that are presently in place through court rules and which
have indeed been helpful to consumer credit defendants, who rarely have
attorneys to represent them, even when they learn that they have been
sued. The notice provides basic understanding of the consequences of
legal actions taken against them and the importance of responding to the
lawsuit. It has also reduced the number of default judgments.  There is
a significant and documented problem with faulty service that results in
default judgments with serious life-altering ramifications. Without
notice, defendants do not appear in court, and debt buyers easily obtain
default judgments. These judgments are enforced by freezing people's
bank accounts and garnishing their wages, hampering their ability to
then pay for basic necessities such as food, utilities, medication and
housing. These judgments appear are public records, making it close to
impossible for a consumer to secure housing or employment, or to take
out a loan. The provisions of this bill would protect all consumers and
domestic abuse survivors in particular, by ensuring that New Yorkers
receive actual notice of debt collection actions.

Current law allows debt collectors to provide minimal and vague informa-
tion in the complaint that initiates the case, making it very difficult
for consumers to identify the debt or the company collecting it. This
bill requires court papers to include more information about the debt
sued upon. This would ensure that all New Yorkers will be better able to
identify the debt on which they are being sued. There are many debts
that result from identity theft or mistaken identity and, in other situ-
ations the defend- ant may not recognize the debt as theirs from the
minimal information provided on the initial legal papers and may there-
fore not respond. This legislation will be particularly important for
domestic violence survivors as it will help them identify the debt and
assert defenses in cases involving debts they did not voluntarily incur
but that were incurred by their abusers in the survivor's name.

This legislation will reduce the statute of limitations for consumer
credit actions from six to three years. Reducing the statute of limita-
tions requires creditors to file their claims while memories are fresh
and records are still available. States with three year statutes of
limitation include: Arizona, Arkansas, Delaware, Kansas, Louisiana,
Maryland, Mississippi, Montana, and the District of Columbia. Pennsylva-
nia has a two-year statute of limitation.

Debt collection actions are rife with poor service of process as
confirmed in numerous studies and by New York governmental institutions.
Indeed, questionable service of process is the reason for the exceeding-
ly high number of default judgments in consumer credit actions. Because
consumer defendants rarely have attorneys, improper service is a defense
they often unknowingly waive when they finally discover they have been
sued, even though service of process is a requirement of due process
rights afforded under the United States Constitution. Current law places
time limits on a defendant's right to assert improper service as a
defense or to seek dismissal of the case on this basis. To protect
consumers from unknowingly waiving this legitimate defense, the bill
would allow consumer defendants to assert improper service as a defense
and seek dismissal of the lawsuit beyond the time limits in current law.

Debt collection actions are also rife with faulty documentation and
debts that are too old to be sued on. To ensure that default judgment
applications in debt collection lawsuits are evaluated on the merits,
and that default judgments are not entered on time-barred debts, this
bill requires plaintiffs seeking default judgments to provide basic
proof of the debt, its entitlement to judgment, and the timeliness of
the lawsuit. This includes an affidavit from the original creditor with
proof of the debt and the consumer's default in payment. If the debt was
sold, affidavits proving the sale must be submitted to show that the
plaintiff is the current owner entitled to obtain the judgment. To
protect consumers from the entry of judgment on time-barred debts, this
bill would require that applications for default judgments in consumer
credit actions include a statement that the creditor or its attorney has
reason to believe that the statute of limitations has not expired.

This legislation will benefit all consumers and for domestic violence
survivors, it will go a long way toward helping break the cycle of
violence and domestic abuse that enables perpetrators of domestic abuse
to exercise control over their victims and their finances in a manner
that prevents the victim from leaving a dangerous relationship or which
forces them to return to it.

 
LEGISLATIVE HISTORY:

2018: A.1752-A/S.8959-A - A.Cal/S.Rules
2017: A.1752 - A.Cal.
2016: A.4438 - A. Judi
2015: A.4438 - A. Cal.
2013-14: Similar to A.9053/S.2454 - Passed Assembly/S. Judiciary
2011-12: Similar to A.633/5.677-A - Assembly Calendar/S. Judiciary
2010: A.7558-A/S.4398-A - Passed Assembly/S. Finance
2009: A.7558-A/S.439S-A - Passed Assembly/S. Codes

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
Immediately; provided, however, that sections two, three, five, six,
seven, eight, nine, ten, eleven and twelve shall take effect on the one
hundred eightieth day after it shall have become a law and shall apply
to actions and proceedings commenced on or after such date; and
provided, further, that section four of this act shall take effect on
the one hundred fiftieth day after this act shall have become a law.

S4827C - Bill Text download pdf


                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 4827--C

                       2019-2020 Regular Sessions

                            I N  S E N A T E

                             March 26, 2019
                               ___________

Introduced  by  Sens.  THOMAS, FELDER, KRUEGER -- read twice and ordered
  printed, and when printed to be committed to the Committee on  Judici-
  ary  --  committee  discharged,  bill  amended,  ordered  reprinted as
  amended and recommitted to said  committee  --  committee  discharged,
  bill  amended,  ordered  reprinted  as amended and recommitted to said
  committee -- recommitted to the Committee on Judiciary  in  accordance
  with  Senate  Rule  6,  sec.  8 -- committee discharged, bill amended,
  ordered reprinted as amended and recommitted to said committee

AN ACT to amend the civil practice law and rules and the judiciary  law,
  in relation to consumer 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".
  §  2.  Section  105  of the civil practice law and rules is amended by
adding two new subdivisions (h-1) and (q-1) to read as follows:
  (H-1) FINANCE CHARGE. THE TERM "FINANCE  CHARGE"  MEANS  THE  COST  OF
CONSUMER CREDIT AS A DOLLAR AMOUNT, INCLUDES ANY CHARGE PAYABLE DIRECTLY
OR  INDIRECTLY BY THE CONSUMER AND IMPOSED DIRECTLY OR INDIRECTLY BY THE
CREDITOR AS AN INCIDENT TO OR A CONDITION OF THE  EXTENSION  OF  CREDIT,
AND  DOES  NOT INCLUDE ANY CHARGE OF A TYPE PAYABLE IN A COMPARABLE CASH
TRANSACTION.
  (Q-1) ORIGINAL CREDITOR. THE TERM "ORIGINAL CREDITOR" MEANS THE ENTITY
THAT OWNED A CONSUMER CREDIT ACCOUNT AT THE DATE OF DEFAULT GIVING  RISE
TO A CAUSE OF ACTION.
  § 3. 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00927-12-0

S. 4827--C                          2

HUNDRED FOURTEEN-I of this article or article 2 of the  uniform  commer-
cial code or article 36-B of the general business law;
  §  4.  The  civil  practice  law  and rules is amended by adding a new
section 214-i to read as follows:
  § 214-I. 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. NOTWITHSTANDING
ANY OTHER PROVISION OF  LAW,  WHEN  THE  APPLICABLE  LIMITATIONS  PERIOD
EXPIRES,  ANY  SUBSEQUENT PAYMENT TOWARD, WRITTEN OR ORAL AFFIRMATION OF
OR OTHER ACTIVITY ON THE DEBT DOES NOT REVIVE OR EXTEND THE  LIMITATIONS
PERIOD.
  §  5.  The  civil  practice  law  and rules is amended by adding a new
section 306-d to read as follows:
  § 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 MAY WISH TO CONTACT AN ATTORNEY.
  YOU  SHOULD  RESPOND  TO  THE LAWSUIT AS SOON AS POSSIBLE BY FILING AN
"ANSWER" WHICH MAY BE DONE AT THE COURT CLERK'S OFFICE LISTED ABOVE.
  IF YOU DO NOT RESPOND TO THE LAWSUIT, THE  COURT  MAY  ENTER  A  MONEY
JUDGMENT  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 MAY 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.
ADDITIONAL  INFORMATION  CAN BE FOUND AT THE NEW YORK STATE COURT SYSTEM
WEBSITE.
SOURCES OF INFORMATION AND ASSISTANCE:
THE COURT ENCOURAGES YOU TO INFORM YOURSELF  ABOUT  YOUR  OPTIONS  AS  A
DEFENDANT  IN  THIS  LAWSUIT.  IN  ADDITION TO SEEKING ASSISTANCE FROM A

S. 4827--C                          3

PRIVATE ATTORNEY OR LEGAL AID OFFICE, THERE ARE  FREE  LEGAL  ASSISTANCE
COMPUTER PROGRAMS THAT YOU CAN USE ONLINE TO HELP YOU REPRESENT YOURSELF
IN THIS LAWSUIT.
FOR  FURTHER INFORMATION, OR TO LOCATE A LEGAL AID PROGRAM NEAR YOU, YOU
MAY VISIT THE LAWHELPNY WEBSITE OR  THE  NEW  YORK  STATE  COURT  SYSTEM
WEBSITE,  WHICH  HAS  INFORMATION FOR REPRESENTING YOURSELF AND LINKS TO
OTHER RESOURCES AT [INSERT URL FOR CONSUMER CREDIT RESOURCES FOR  UNREP-
RESENTED  LITIGANTS  PUBLISHED  BY  THE  NEW  YORK STATE OFFICE OF COURT
ADMINISTRATION].
  (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-
BLE. RECEIPT OF THE ADDITIONAL NOTICE BY THE DEFENDANT DOES  NOT  CONFER
JURISDICTION ON THE COURT IN THE ABSENCE OF PROPER SERVICE OF PROCESS.
  (D)  THE  CHIEF ADMINISTRATIVE JUDGE SHALL ISSUE A SPANISH TRANSLATION
OF THE NOTICE IN SUBDIVISION (A) OF THIS SECTION AND SHALL MAINTAIN  AND
PUBLISH  THE  URL ADDRESS FOR THE WEB PAGE CONTAINING CONSUMER RESOURCES
FOR UNREPRESENTED LITIGANTS.
  § 6. 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.
  § 7. Rule 3016 of the civil practice  law  and  rules  is  amended  by
adding a new subdivision (j) to read as follows:
  (J)  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 ACCOUNT NUMBER PRINTED ON THE MOST
RECENT MONTHLY STATEMENT RECORDING A PURCHASE TRANSACTION, LAST  PAYMENT
OR BALANCE TRANSFER;
  (3)  THE  DATE  AND  AMOUNT  OF THE LAST PAYMENT OR, IF NO PAYMENT WAS
MADE, A STATEMENT THAT THE PURCHASER, BORROWER OR DEBTOR MADE NO PAYMENT
ON THE ACCOUNT;
  (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;

S. 4827--C                          4

  (5) (A) EXCEPT AS PROVIDED IN SUBPARAGRAPH (B) OF THIS  PARAGRAPH,  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.
  (B)  IF  THE  ACCOUNT  WAS  A  REVOLVING  CREDIT  ACCOUNT, AN ITEMIZED
ACCOUNTING OF THE DEBT, INCLUDING: (I) THE TOTAL AMOUNT OF THE DEBT  DUE
AS  OF  CHARGE-OFF;  (II)  THE  TOTAL  AMOUNT  OF INTEREST ACCRUED SINCE
CHARGE-OFF; (III) THE TOTAL  AMOUNT  OF  NON-INTEREST  CHARGES  OR  FEES
ACCRUED  SINCE  CHARGE-OFF; AND (IV) THE TOTAL AMOUNT OF PAYMENTS AND/OR
CREDITS MADE ON THE DEBT SINCE CHARGE-OFF;
  (6) THE ACCOUNT BALANCE PRINTED ON THE MOST RECENT  MONTHLY  STATEMENT
RECORDING A PURCHASE TRANSACTION, LAST PAYMENT OR BALANCE TRANSFER;
  (7) (A) WHETHER THE PLAINTIFF IS THE ORIGINAL CREDITOR.
  (B) 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 FROM  THE
ORIGINAL  CREDITOR  TO  THE PLAINTIFF AND THE DATE ON WHICH THE DEBT WAS
ASSIGNED TO THAT OWNER BY THE ORIGINAL CREDITOR OR SUBSEQUENT OWNER; AND
(III) THE AMOUNT DUE AT THE TIME OF THE SALE OR ASSIGNMENT OF  THE  DEBT
BY THE ORIGINAL CREDITOR; AND
  (8)  ANY  MATTERS REQUIRED TO BE STATED WITH PARTICULARITY PURSUANT TO
RULE 3015 OF THIS ARTICLE.
  § 8. 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; 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 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 TO COLLECT A DEBT ARISING OUT OF A CONSUMER
CREDIT TRANSACTION WHERE A CONSUMER IS A DEFENDANT OR 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 WHICH, IN ANY ACTION TO COLLECT A
DEBT ARISING OUT OF A CONSUMER CREDIT TRANSACTION WHERE A CONSUMER IS  A
DEFENDANT, INCLUDES ANY AMENDED RESPONSIVE PLEADING.
  §  9.  Rule  3212  of  the  civil practice law and rules is amended by
adding a new subdivision (j) to read as follows:

S. 4827--C                          5

  (J) ADDITIONAL NOTICE IN ANY ACTION TO COLLECT A DEBT ARISING  OUT  OF
A CONSUMER CREDIT TRANSACTION WHERE A CONSUMER IS A DEFENDANT.
  1.  AT  THE  TIME  OF SERVICE OF A NOTICE OF MOTION ANY PART OF  WHICH
REQUESTS SUMMARY JUDGMENT IN WHOLE OR IN PART, WHERE THE   MOVING  PARTY
IS  A  PLAINTIFF AND THE RESPONDENT IS A CONSUMER DEFENDANT IN AN ACTION
TO COLLECT A DEBT ARISING OUT OF A   CONSUMER  CREDIT  TRANSACTION,  AND
WHERE THE CONSUMER DEFENDANT AGAINST  WHOM SUMMARY JUDGMENT IS SOUGHT IS
NOT  REPRESENTED BY AN ATTORNEY, THE PLAINTIFF SHALL SUBMIT TO THE CLERK
A STAMPED, UNSEALED ENVELOPE ADDRESSED TO THE  DEFENDANT  TOGETHER  WITH
THE  FOLLOWING ADDITIONAL NOTICE IN ENGLISH AND SPANISH TO BE PRINTED IN
CLEAR TYPE NO LESS THAN TWELVE-POINT IN SIZE:
                            IMPORTANT NOTICE
THE PLAINTIFF HAS ASKED THE COURT  TO  ENTER  JUDGMENT  AGAINST  YOU  BY
MAKING A MOTION FOR SUMMARY JUDGMENT.  KEEP THIS NOTICE AND THE ENVELOPE
IT  CAME  IN.  THE  MOTION FOR SUMMARY JUDGMENT WAS SEPARATELY SERVED ON
YOU.  TO AVOID ENTRY OF JUDGMENT:
(1) YOU MUST APPEAR IN COURT AS DIRECTED BELOW:
WHERE:  NAME OF COURT, STREET ADDRESS, ROOM NUMBER
WHEN:  DATE AND TIME
(2) YOU SHOULD OPPOSE THE MOTION IN WRITING.
HOW TO OPPOSE THE MOTION:
  (1) STATE THE LEGAL REASONS WHY THE COURT SHOULD  NOT  ENTER  JUDGMENT
AGAINST YOU, INCLUDING YOUR DEFENSES.
  (2) STATE THE FACTS THAT SUPPORT YOUR DEFENSES.
  (3) ATTACH AFFIDAVITS AND/OR EXHIBITS TO SUPPORT THE FACTS YOU ASSERT.
  (A)  AFFIDAVITS  ARE SWORN STATEMENTS OF WITNESSES (INCLUDING YOU) WHO
STATE FACTS THEY KNOW TO BE TRUE.  THE AFFIDAVIT SHOULD STATE THE  FACTS
AND  HOW THE WITNESS KNOWS THEM.  ALSO, THE AFFIDAVIT SHOULD EXPLAIN ANY
EXHIBITS.  AN AFFIDAVIT OF SERVICE IS AN AFFIDAVIT THAT STATES  HOW  AND
WHEN  PAPERS  WERE  SERVED.    AN AFFIDAVIT MUST BE SIGNED IN FRONT OF A
NOTARY. FREE FORMS ARE AVAILABLE ON THE  NEW  YORK  STATE  COURT  SYSTEM
WEBSITE  AT  [INSERT URL FOR CONSUMER CREDIT RESOURCES FOR UNREPRESENTED
LITIGANTS PUBLISHED BY THE NEW  YORK  STATE  OFFICE  OF  COURT  ADMINIS-
TRATION].
  (B) EXHIBITS ARE COPIES OF DOCUMENTS. EXHIBITS ARE USUALLY ATTACHED TO
AFFIDAVITS.
  (4)  HAVE SOMEONE (NOT YOU OR ANOTHER DEFENDANT IN THE LAWSUIT) MAIL A
COPY OF YOUR OPPOSITION TO THE PLAINTIFF'S ATTORNEY  BEFORE  YOUR  COURT
DATE AND HAVE THEM PREPARE AN AFFIDAVIT OF SERVICE BY MAIL.
  (5)  BRING  A  COPY OF YOUR OPPOSITION AND THE AFFIDAVIT OF SERVICE TO
YOUR COURT DATE.
  (6) ATTEND YOUR COURT DATE.
IF YOU NEED MORE TIME:
IF YOU NEED MORE TIME TO  PREPARE  YOUR  WRITTEN  RESPONSE,  YOU  SHOULD
APPEAR AT YOUR COURT DATE AND ASK THE JUDGE FOR MORE TIME.  YOU CAN ALSO
ASK THE JUDGE TO REFER YOU FOR LEGAL HELP.
IF YOU NEED LEGAL HELP:
YOU  MAY  SEEK LEGAL HELP FROM A PRIVATE ATTORNEY OR A LEGAL AID OFFICE.
SOME COURTS HAVE FREE  LEGAL  ASSISTANCE  PROGRAMS  FOR  PEOPLE  WITHOUT
LAWYERS.    YOU  CAN  FIND  RESOURCES ON THE NEW YORK STATE COURT SYSTEM
WEBSITE AT [INSERT URL FOR CONSUMER CREDIT RESOURCES  FOR  UNREPRESENTED
LITIGANTS  PUBLISHED  BY  THE  NEW  YORK  STATE OFFICE OF COURT ADMINIS-
TRATION].
  2. THE CLERK  PROMPTLY  SHALL  MAIL  TO  THE  DEFENDANT  THE  ENVELOPE
CONTAINING  THE  ADDITIONAL  NOTICE  SET  FORTH IN PARAGRAPH ONE OF THIS
SUBDIVISION AND NOTE THE DATE OF MAILING IN  THE  CASE  RECORD.  SUMMARY

S. 4827--C                          6

JUDGMENT SHALL NOT BE ENTERED BASED ON DEFENDANT'S FAILURE TO OPPOSE THE
MOTION  UNLESS  THERE HAS BEEN COMPLIANCE WITH THIS SECTION AND AT LEAST
FOURTEEN DAYS HAVE ELAPSED FROM THE DATE OF  MAILING  BY  THE  CLERK  OR
NINETEEN  DAYS  IF  THE  PLAINTIFF'S NOTICE OF MOTION DEMANDS ADDITIONAL
TIME UNDER SUBDIVISION (B) OF RULE 2214 OF THIS CHAPTER.
  3. THE CHIEF ADMINISTRATIVE JUDGE SHALL ISSUE A SPANISH TRANSLATION OF
THE NOTICE IN PARAGRAPH ONE OF THIS SUBDIVISION AND SHALL  MAINTAIN  AND
PUBLISH  THE  URL  ADDRESS  FOR  THE WEB PAGE CONTAINING CONSUMER CREDIT
RESOURCES FOR UNREPRESENTED LITIGANTS.
  § 10. Section 3213 of the civil practice law and rules, as amended  by
chapter 210 of the laws of 1969, is amended to read as follows:
  §  3213.  Motion  for  summary  judgment in lieu of complaint. When an
action is based upon an instrument for the payment of money only or upon
any judgment, the plaintiff may serve  with  the  summons  a  notice  of
motion  for  summary  judgment  and  the  supporting papers in lieu of a
complaint. The summons served with such motion papers shall require  the
defendant  to  submit  answering  papers  on  the motion within the time
provided in the notice of motion. The minimum time such motion shall  be
noticed  to be heard shall be as provided by subdivision (a) of rule 320
for making an appearance, depending upon the method of service.  If  the
plaintiff  sets  the  hearing  date of the motion later than the minimum
time therefor, he may require the defendant  to  serve  a  copy  of  his
answering  papers  upon  him  within  such  extended period of time, not
exceeding ten days, prior to such hearing date. No default judgment  may
be  entered  pursuant  to  subdivision  (a) of section 3215 prior to the
hearing date of the motion. If the motion  is  denied,  the  moving  and
answering papers shall be deemed the complaint and answer, respectively,
unless  the  court  orders  otherwise. THE ADDITIONAL NOTICE REQUIRED BY
SUBDIVISION (J) OF RULE 3212 SHALL BE APPLICABLE TO A MOTION MADE PURSU-
ANT TO THIS SECTION IN ANY ACTION TO COLLECT A DEBT  ARISING  OUT  OF  A
CONSUMER CREDIT TRANSACTION WHERE A CONSUMER IS A DEFENDANT.
  §  11.  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. THE CHIEF ADMINISTRATIVE JUDGE SHALL
ISSUE FORM AFFIDAVITS TO SATISFY THE REQUIREMENTS  OF  THIS  SUBDIVISION

S. 4827--C                          7

FOR  CONSUMER  CREDIT  TRANSACTIONS.  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)  AFFIDAVIT. A REQUEST FOR A DEFAULT JUDGMENT ENTERED BY THE CLERK,
MUST BE ACCOMPANIED BY AN AFFIDAVIT  BY  THE  PLAINTIFF  OR  PLAINTIFF'S
ATTORNEY  STATING THAT AFTER REASONABLE INQUIRY, HE OR SHE HAS REASON TO
BELIEVE THAT THE STATUTE OF LIMITATIONS HAS  NOT  EXPIRED.    THE  CHIEF
ADMINISTRATIVE JUDGE SHALL ISSUE FORM AFFIDAVITS TO SATISFY THE REQUIRE-
MENTS OF THIS SUBDIVISION FOR CONSUMER CREDIT TRANSACTIONS.
  §  12.  The  civil  practice  law and rules is amended by adding a new
section 7516 to read as follows:
  § 7516. 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
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.
  §  13. Subdivision 2 of section 212 of the judiciary law is amended by
adding a new paragraph (aa) to read as follows:
  (AA) NOT LATER THAN  JANUARY  FIRST,  TWO  THOUSAND  TWENTY-ONE,  MAKE
AVAILABLE  SPANISH  TRANSLATIONS  OF  THE ADDITIONAL NOTICES IN CONSUMER
CREDIT TRANSACTION ACTIONS AND PROCEEDINGS REQUIRED BY SECTION 306-D AND
SUBDIVISION (J) OF RULE 3212 OF THE CIVIL PRACTICE LAW  AND  RULES,  AND
MAKE  AVAILABLE  FORM AFFIDAVITS REQUIRED FOR A MOTION FOR DEFAULT JUDG-
MENT IN A CONSUMER CREDIT TRANSACTION ACTION OR PROCEEDING  REQUIRED  BY
SUBDIVISION (F) OF SECTION 3215 OF THE CIVIL PRACTICE LAW AND RULES.
  §  14. This act shall take effect immediately; provided, however, that
sections two, three, five, six, seven,  eight,  nine,  ten,  eleven  and
twelve shall take effect on the one hundred eightieth day after it shall
have  become  a law and shall apply to actions and proceedings commenced
on or after such date; and provided, further, that section four of  this
act  shall  take  effect  on the one hundred fiftieth day after this act
shall have become a law.

Co-Sponsors

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S4827D - Details

See Assembly Version of this Bill:: A6909
Current Committee:: Senate Judiciary
Law Section:: Civil Practice Law and Rules
Laws Affected:: Amd CPLR, generally; amd §212, Judy L
Versions Introduced in Other Legislative Sessions:: 2013-2014: A2678
2015-2016: A3877, A4438
2017-2018: S8959, A1752
2021-2022: S153, A2382

S4827D - Summary

S4827D - Sponsor Memo

 
BILL NUMBER: S4827d

SPONSOR: THOMAS
 
TITLE OF BILL:

An act to amend the civil practice law and rules and the judiciary law,
in relation to consumer credit transactions

 
PURPOSE OF BILL:

This bill would strengthen consumer protections in consumer debt
collection proceedings.

 
SUMMARY OF PROVISIONS OF BILL:

The bill would amend pleading requirements particular to consumer credit
actions by requiring that the complaint provide the name of the original
creditor, the last four digits of the account number printed on the most
recent monthly statement recording a purchase transaction, last payment,
or balance transfer, the date and amount of the last payment, an itemi-
zation of the amount sought, the account balance printed on the most

recent monthly statement recording a purchase transaction, last payment,
or balance transfer, and whether the plaintiff is the original creditor,
and if not, information about the sale and assignment of the debt. The
bill also requires that a copy of the contract or other written instru-
ment on which the action is based be attached to the complaint.

The bill would reduce the statute of limitations on consumer credit
actions from six years to three years.

The bill would permit defendants in consumer credit actions to raise
improper service as a defense in their answer and preserve that defense
for trial without having to file a separate motion to dismiss within 60
days as under current law.

It would require that an additional notice of a pending consumer credit
action be mailed to the defendant by the clerk of the court, with the
notice and mailing envelope provided by the plaintiff. This notice would
provide important information to the consumer credit defendant, includ-
ing the website address for consumer credit resources maintained by the
New York State Office of Court Administration. The chief administrative
judge would be required to make available Spanish translations of said
additional notices.

Similar in concept to the notice provided to the consumer upon commence-
ment of the action, the bill would require an additional notice advising
defendants in consumer credit actions against whom a summary judgment
motion has been made of the significance and consequence of such a
motion, and how to respond. It would also include the website address
for consumer credit resources maintained by the New York State Office of
Court Administration to assist consumer credit defendants in responding
to such motions.

To prevent the entry of default judgments on claims that lack merit, the
bill would require applications for default judgments in consumer credit
actions to conform with specific requirements. These include (1) an
affidavit by the original creditor of the facts constituting the debt,
the default in payment, the sale or assignment 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 entity, 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 plaintiff, which includes a chain
of title of the debt, completed by the plaintiff or plaintiff's witness.
The bill will also require that applications for default judgments in
consumer credit actions include a statement that after reason- able
inquiry, the plaintiff or its attorney has reason to believe that the
statute of limitations has not expired. Finally, the chief administra-
tive judge would be required to issue form affidavits for default
motions based upon consumer credit transactions, which would standardize
and make uniform the motion disposition process for the courts.

Finally, the bill would provide similarly exacting requirements for
consumer creditors who seek to enter judgment based upon an arbitration
award.

 
JUSTIFICATION:

There have been serious concerns reported about the growing problem of
abusive debt collection practices, including filing suit on debts that
are too old to be sued on, are a result of identity theft or are debts
that have been paid or otherwise discharged. Original creditors, such as
credit card issuers, routinely sell large portfolios of consumer debt
accounts to debt buyers, who regularly re-sell the debts. Minimal infor-
mation or documentation is transferred to debt purchasers. The process
makes it difficult for a consumer to identify the debt, the current
owner, or amount claimed and results in collection efforts that continue
for years, including lawsuits filed after the statute of limitations has
expired. There have been instances in which a consumer paid a debt, but
was later contacted by another debt buyer attempting to collect it.
Other reported concerns include lack of notice to the defendant of the
law suit resulting in a default judgment against the defendant without a
requirement to produce proof of the debt sued on. These default judg-
ments are collected through wage garnishment and bank account
restraints, which is often the first time a consumer learns that they
were sued. Stopping garnishment and unfreezing bank accounts requires
that the consumer take action in court, but rarely do consumers have
attorneys to help. It is especially burdensome given the limitations on
daily life and the health challenges related to the COVID-19 pandemic.

The devastating toll that abusive debt collection lawsuits take on
consumers is a longstanding and persistent problem identified by numer-
ous governmental and public policy institutions up through this day. In
its 2010 report, Repairing A Broken System: Protecting Consumers in Debt
Collection Litigation and Arbitration. the Federal Trade Commission
recommended state-level reforms similar to those contained in this bill.
In 2016, Human Rights Watch made similar recommendations in a study
called Rubber Stamp Justice, which incorporated data supplied by the New
York court system. Most recently, in May 2020 The PEW Charitable Trusts
issued How Debt Collectors Are Transforming the Business of State
Courts, which noted, among many other things: "Debt collection lawsuits
that end in default judgment can have lasting consequences for consum-
ers' economic stability."(Page 17.) PEW also recommended a review of
state policies to ensure that both sides can effectively present their
cases. This bill responds to these calls for better delivery of justice
to consumer defendants.


Abusive debt collection lawsuits exploit current gaps in our State's
civil procedure laws and rules. The proposed legislation helps to fill
those gaps. In doing so, this legislation will protect all consumers,
and will particularly help ameliorate some of the forms of economic
abuse, including identity theft, suffered by domestic violence victims
at the hands of their abusers.

At a hearing on economic abuse as a form of domestic abuse, held on
December 5, 2012, by the New York State Assembly Committees on Judiciary
and Codes, civil legal service providers, domestic violence prevention
advocates and the Office of Court Administration highlighted the insid-
ious and pervasive nature of various forms of economic abuse perpetrated
by abusers in the family violence context to exercise power and control
over their victims and their finances.  The types of abuse cited
included incurring debt in the survivor's name through false statements
or coercion, perpetrating identity theft or otherwise incurring debt
without the survivor's knowledge.  Witnesses at the hearing cited this
legislation as important and helpful to meliorating economic abuse
suffered by domestic abuse survivors.

This legislation requires statewide institution of additional notice
requirements that are presently in place through court rules and which
have indeed been helpful to consumer credit defendants, who rarely have
attorneys to represent them, even when they learn that they have been
sued. The notice provides basic understanding of the consequences of
legal actions taken against them and the importance of responding to the
lawsuit. It has also reduced the number of default judgments. There is a
significant and documented problem with faulty service that results in
default judgments with serious life-altering ramifications. Without
notice, defendants do not appear in court, and debt buyers easily obtain
default judgments. These judgments are enforced by freezing people's
bank accounts and garnishing their wages, hampering their ability to
then pay for basic necessities such as food, utilities, medication and
housing. These judgments appear are public records, making it close to
impossible for a consumer to secure housing or employment, or to take
out a loan. The provisions of this bill would protect all consumers and
domestic abuse survivors in particular, by ensuring that New Yorkers
receive actual notice of debt collection actions.

Current law allows debt collectors to provide minimal and vague informa-
tion in the complaint that initiates the case, making it very difficult
for consumers to identify the debt or the company collecting it. This
bill requires court papers to include more information about the debt
sued upon. This would ensure that all New Yorkers will be better able to
identify the debt on which they are being sued. There are many debts
that result from identity theft or mistaken identity and, in other situ-
ations the defend- ant may not recognize the debt as theirs from the
minimal information provided on the initial legal papers and may there-
fore not respond. This legislation will be particularly important for
domestic violence survivors as it will help them identify the debt and
assert defenses in cases involving debts they did not voluntarily incur
but that were incurred by their abusers in the survivor's name.

This legislation will reduce the statute of limitations for consumer
credit actions from six to three years. Reducing the statute of limita-
tions requires creditors to file their claims while memories are fresh
and records are still available. States with three year statutes of
limitation include: Arizona, Arkansas, Delaware, Kansas, Louisiana,
Maryland, Mississippi, Montana, and the District of Columbia. Pennsylva-
nia has a two-year statute of limitation.

Debt collection actions are rife with poor service of process as
confirmed in numerous studies and by New York governmental institutions.
Indeed, questionable service of process is the reason for the exceeding-
ly high number of default judgments in consumer credit actions. Because
consumer defendants rarely have attorneys, improper service is a defense
they often unknowingly waive when they finally discover they have been
sued, even though service of process is a requirement of due process
rights afforded under the United States Constitution. Current law places
time limits on a defendant's right to assert improper service as a
defense or to seek dismissal of the case on this basis. To protect
consumers from unknowingly waiving this legitimate defense, the bill
would allow consumer defendants to assert improper service as a defense
and seek dismissal of the lawsuit beyond the time limits in current law.

Debt collection actions are also rife with faulty documentation and
debts that are too old to be sued on. To ensure that default judgment
applications in debt collection lawsuits are evaluated on the merits,
and that default judgments are not entered on time-barred debts, this
bill requires plaintiffs seeking default judgments to provide basic
proof of the debt, its entitlement to judgment, and the timeliness of
the lawsuit. This includes an affidavit from the original creditor with
proof of the debt and the consumer's default in payment. If the debt was
sold, affidavits proving the sale must be submitted to show that the
plaintiff is the current owner entitled to obtain the judgment. To
protect consumers from the entry of judgment on time-barred debts, this
bill would require that applications for default judgments in consumer
credit actions include a statement that the creditor or its attorney has
reason to believe that the statute of limitations has not expired.

This legislation will benefit all consumers and for domestic violence
survivors, it will go a long way toward helping break the cycle of
violence and domestic abuse that enables perpetrators of domestic abuse
to exercise control over their victims and their finances in a manner
that prevents the victim from leaving a dangerous relationship or which
forces them to return to it.

 
LEGISLATIVE HISTORY:

2018: A.1752-A/S.8959-A - A.Cal/S.Rules
2017: A.1752 - A.Cal.
2016: A.4438 - A. Judi
2015: A.4438 - A. Cal.
2013-14: Similar to A.9053/S.2454 - Passed Assembly/S. Judiciary
2011-12: Similar to A.633/5.677-A - Assembly Calendar/S. Judiciary
2010: A.7558-A/S.4398-A - Passed Assembly/S. Finance
2009: A.7558-A/S.439S-A - Passed Assembly/S. Codes

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
Immediately; provided, however, that sections two, three, five, six,
seven, eight, nine, ten, eleven and twelve shall take effect on the one
hundred eightieth day after it shall have become a law and shall apply
to actions and proceedings commenced on or after such date; and
provided, further, that section four of this act shall take effect on
the one hundred fiftieth day after this act shall have become a law.

S4827D - Bill Text download pdf


                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 4827--D

                       2019-2020 Regular Sessions

                            I N  S E N A T E

                             March 26, 2019
                               ___________

Introduced  by  Sens.  THOMAS,  CARLUCCI,  FELDER, KAPLAN, KRUEGER, MAY,
  PERSAUD, RAMOS, SEPULVEDA -- read twice and ordered printed, and  when
  printed  to  be  committed  to the Committee on Judiciary -- committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee  --  committee  discharged,  bill  amended,  ordered
  reprinted  as amended and recommitted to said committee -- recommitted
  to the Committee on Judiciary in accordance with Senate Rule 6, sec. 8
  -- committee discharged, bill amended, ordered  reprinted  as  amended
  and  recommitted  to  said  committee  --  committee  discharged, bill
  amended, ordered reprinted as amended and recommitted to said  commit-
  tee

AN  ACT to amend the civil practice law and rules and the judiciary law,
  in relation to consumer 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".
  § 2. Section 105 of the civil practice law and  rules  is  amended  by
adding two new subdivisions (h-1) and (q-1) to read as follows:
  (H-1)  FINANCE  CHARGE.  THE  TERM  "FINANCE CHARGE" MEANS THE COST OF
CONSUMER CREDIT AS A DOLLAR AMOUNT, INCLUDES ANY CHARGE PAYABLE DIRECTLY
OR INDIRECTLY BY THE CONSUMER AND IMPOSED DIRECTLY OR INDIRECTLY BY  THE
CREDITOR  AS  AN  INCIDENT TO OR A CONDITION OF THE EXTENSION OF CREDIT,
AND DOES NOT INCLUDE ANY CHARGE OF A TYPE PAYABLE IN A  COMPARABLE  CASH
TRANSACTION.
  (Q-1) ORIGINAL CREDITOR. THE TERM "ORIGINAL CREDITOR" MEANS THE ENTITY
THAT  OWNED A CONSUMER CREDIT ACCOUNT AT THE DATE OF DEFAULT GIVING RISE
TO A CAUSE OF ACTION.
  § 3. 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:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD00927-14-0

S. 4827--D                          2

  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-I  of this article or article 2 of the uniform commer-
cial code or article 36-B of the general business law;
  §  4.  The  civil  practice  law  and rules is amended by adding a new
section 214-i to read as follows:
  § 214-I. 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. NOTWITHSTANDING
ANY OTHER PROVISION OF  LAW,  WHEN  THE  APPLICABLE  LIMITATIONS  PERIOD
EXPIRES,  ANY  SUBSEQUENT PAYMENT TOWARD, WRITTEN OR ORAL AFFIRMATION OF
OR OTHER ACTIVITY ON THE DEBT DOES NOT REVIVE OR EXTEND THE  LIMITATIONS
PERIOD.
  §  5.  The  civil  practice  law  and rules is amended by adding a new
section 306-d to read as follows:
  § 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 MAY WISH TO CONTACT AN ATTORNEY.
  YOU  SHOULD  RESPOND  TO  THE LAWSUIT AS SOON AS POSSIBLE BY FILING AN
"ANSWER" WHICH MAY BE DONE AT THE COURT CLERK'S OFFICE LISTED ABOVE.
  IF YOU DO NOT RESPOND TO THE LAWSUIT, THE  COURT  MAY  ENTER  A  MONEY
JUDGMENT  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 MAY 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.
ADDITIONAL  INFORMATION  CAN BE FOUND AT THE NEW YORK STATE COURT SYSTEM
WEBSITE.
SOURCES OF INFORMATION AND ASSISTANCE:

S. 4827--D                          3

THE COURT ENCOURAGES YOU TO INFORM YOURSELF  ABOUT  YOUR  OPTIONS  AS  A
DEFENDANT  IN  THIS  LAWSUIT.  IN  ADDITION TO SEEKING ASSISTANCE FROM A
PRIVATE ATTORNEY OR LEGAL AID OFFICE, THERE ARE  FREE  LEGAL  ASSISTANCE
COMPUTER PROGRAMS THAT YOU CAN USE ONLINE TO HELP YOU REPRESENT YOURSELF
IN THIS LAWSUIT.
FOR  FURTHER INFORMATION, OR TO LOCATE A LEGAL AID PROGRAM NEAR YOU, YOU
MAY VISIT THE LAWHELPNY WEBSITE OR  THE  NEW  YORK  STATE  COURT  SYSTEM
WEBSITE,  WHICH  HAS  INFORMATION FOR REPRESENTING YOURSELF AND LINKS TO
OTHER RESOURCES AT: ___________________.
  (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-
BLE. RECEIPT OF THE ADDITIONAL NOTICE BY THE DEFENDANT DOES  NOT  CONFER
JURISDICTION ON THE COURT IN THE ABSENCE OF PROPER SERVICE OF PROCESS.
  (D)  THE  CHIEF ADMINISTRATIVE JUDGE SHALL ISSUE A SPANISH TRANSLATION
OF THE NOTICE IN SUBDIVISION (A) OF THIS SECTION AND SHALL MAINTAIN  AND
PUBLISH  THE  URL ADDRESS FOR THE WEB PAGE CONTAINING CONSUMER RESOURCES
FOR UNREPRESENTED LITIGANTS.
  § 6. 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.
  § 7. Rule 3016 of the civil practice  law  and  rules  is  amended  by
adding a new subdivision (j) to read as follows:
  (J)  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, HOWEVER, FOR  THE  PURPOSES
OF  THIS  SECTION,  IF  THE  ACCOUNT WAS A REVOLVING CREDIT ACCOUNT, THE
CHARGE-OFF STATEMENT MAY BE ATTACHED TO THE  COMPLAINT  INSTEAD  OF  THE
CONTRACT  OR  OTHER  WRITTEN  INSTRUMENT,  AND THE FOLLOWING INFORMATION
SHALL BE SET FORTH IN THE COMPLAINT:
  (1) THE NAME OF THE ORIGINAL CREDITOR;
  (2) THE LAST FOUR DIGITS OF THE ACCOUNT NUMBER  PRINTED  ON  THE  MOST
RECENT  MONTHLY STATEMENT RECORDING A PURCHASE TRANSACTION, LAST PAYMENT
OR BALANCE TRANSFER;
  (3) THE DATE AND AMOUNT OF THE LAST PAYMENT  OR,  IF  NO  PAYMENT  WAS
MADE, A STATEMENT THAT THE PURCHASER, BORROWER OR DEBTOR MADE NO PAYMENT
ON THE ACCOUNT;

S. 4827--D                          4

  (4)  IF  THE  COMPLAINT CONTAINS A CAUSE OF ACTION BASED ON AN ACCOUNT
STATED, THE DATE ON OR ABOUT WHICH THE FINAL STATEMENT  OF  ACCOUNT  WAS
PROVIDED TO THE DEFENDANT;
  (5)  (A)  EXCEPT AS PROVIDED IN SUBPARAGRAPH (B) OF THIS PARAGRAPH, 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.
  (B) IF THE ACCOUNT WAS A REVOLVING CREDIT ACCOUNT, AN  ITEMIZATION  OF
THE  AMOUNT  SOUGHT,  BY:    (I)  THE TOTAL AMOUNT OF THE DEBT DUE AS OF
CHARGE-OFF; (II) THE TOTAL AMOUNT OF INTEREST ACCRUED SINCE  CHARGE-OFF;
(III)  THE  TOTAL  AMOUNT  OF NON-INTEREST CHARGES OR FEES ACCRUED SINCE
CHARGE-OFF; AND (IV) THE TOTAL AMOUNT OF PAYMENTS AND/OR CREDITS MADE ON
THE DEBT SINCE CHARGE-OFF;
  (6) THE ACCOUNT BALANCE PRINTED ON THE MOST RECENT  MONTHLY  STATEMENT
RECORDING A PURCHASE TRANSACTION, LAST PAYMENT OR BALANCE TRANSFER;
  (7) (A) WHETHER THE PLAINTIFF IS THE ORIGINAL CREDITOR.
  (B) 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 FROM  THE
ORIGINAL  CREDITOR  TO  THE PLAINTIFF AND THE DATE ON WHICH THE DEBT WAS
ASSIGNED TO THAT OWNER BY THE ORIGINAL CREDITOR OR SUBSEQUENT OWNER; AND
(III) THE AMOUNT DUE AT THE TIME OF THE SALE OR ASSIGNMENT OF  THE  DEBT
BY THE ORIGINAL CREDITOR; AND
  (8)  ANY  MATTERS REQUIRED TO BE STATED WITH PARTICULARITY PURSUANT TO
RULE 3015 OF THIS ARTICLE.
  § 8. 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; 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 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 TO COLLECT A DEBT ARISING OUT OF A CONSUMER
CREDIT TRANSACTION WHERE A CONSUMER IS A DEFENDANT OR 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 WHICH, IN ANY ACTION TO COLLECT A

S. 4827--D                          5

DEBT ARISING OUT OF A CONSUMER CREDIT TRANSACTION WHERE A CONSUMER IS  A
DEFENDANT, INCLUDES ANY AMENDED RESPONSIVE PLEADING.
  §  9.  Rule  3212  of  the  civil practice law and rules is amended by
adding a new subdivision (j) to read as follows:
  (J) ADDITIONAL NOTICE IN ANY ACTION TO COLLECT A DEBT ARISING  OUT  OF
A CONSUMER CREDIT TRANSACTION WHERE A CONSUMER IS A DEFENDANT.
  1.  AT  THE  TIME  OF SERVICE OF A NOTICE OF MOTION ANY PART OF  WHICH
REQUESTS SUMMARY JUDGMENT IN WHOLE OR IN PART, WHERE THE   MOVING  PARTY
IS  A  PLAINTIFF AND THE RESPONDENT IS A CONSUMER DEFENDANT IN AN ACTION
TO COLLECT A DEBT ARISING OUT OF A   CONSUMER  CREDIT  TRANSACTION,  AND
WHERE THE CONSUMER DEFENDANT AGAINST  WHOM SUMMARY JUDGMENT IS SOUGHT IS
NOT  REPRESENTED BY AN ATTORNEY, THE PLAINTIFF SHALL SUBMIT TO THE CLERK
A STAMPED, UNSEALED ENVELOPE ADDRESSED TO THE  DEFENDANT  TOGETHER  WITH
THE  FOLLOWING ADDITIONAL NOTICE IN ENGLISH AND SPANISH TO BE PRINTED IN
CLEAR TYPE NO LESS THAN TWELVE-POINT IN SIZE:
                            IMPORTANT NOTICE
THE PLAINTIFF HAS ASKED THE COURT  TO  ENTER  JUDGMENT  AGAINST  YOU  BY
MAKING A MOTION FOR SUMMARY JUDGMENT.  KEEP THIS NOTICE AND THE ENVELOPE
IT  CAME  IN.  THE  MOTION FOR SUMMARY JUDGMENT WAS SEPARATELY SERVED ON
YOU.  TO AVOID ENTRY OF JUDGMENT:
(1) YOU MUST APPEAR IN COURT AS DIRECTED BELOW:
WHERE:  NAME OF COURT, STREET ADDRESS, ROOM NUMBER
WHEN:  DATE AND TIME
(2) YOU SHOULD OPPOSE THE MOTION IN WRITING.
HOW TO OPPOSE THE MOTION:
  (1) STATE THE LEGAL REASONS WHY THE COURT SHOULD  NOT  ENTER  JUDGMENT
AGAINST YOU, INCLUDING YOUR DEFENSES.
  (2) STATE THE FACTS THAT SUPPORT YOUR DEFENSES.
  (3) ATTACH AFFIDAVITS AND/OR EXHIBITS TO SUPPORT THE FACTS YOU ASSERT.
  (A)  AFFIDAVITS  ARE SWORN STATEMENTS OF WITNESSES (INCLUDING YOU) WHO
STATE FACTS THEY KNOW TO BE TRUE.  THE AFFIDAVIT SHOULD STATE THE  FACTS
AND  HOW THE WITNESS KNOWS THEM.  ALSO, THE AFFIDAVIT SHOULD EXPLAIN ANY
EXHIBITS.  AN AFFIDAVIT OF SERVICE IS AN AFFIDAVIT THAT STATES  HOW  AND
WHEN  PAPERS  WERE  SERVED.    AN AFFIDAVIT MUST BE SIGNED IN FRONT OF A
NOTARY. FREE FORMS ARE AVAILABLE ON THE  NEW  YORK  STATE  COURT  SYSTEM
WEBSITE AT: ____________________.
  (B) EXHIBITS ARE COPIES OF DOCUMENTS. EXHIBITS ARE USUALLY ATTACHED TO
AFFIDAVITS.
  (4)  HAVE SOMEONE (NOT YOU OR ANOTHER DEFENDANT IN THE LAWSUIT) MAIL A
COPY OF YOUR OPPOSITION TO THE PLAINTIFF'S ATTORNEY  BEFORE  YOUR  COURT
DATE AND HAVE THEM PREPARE AN AFFIDAVIT OF SERVICE BY MAIL.
  (5)  BRING  A  COPY OF YOUR OPPOSITION AND THE AFFIDAVIT OF SERVICE TO
YOUR COURT DATE.
  (6) ATTEND YOUR COURT DATE.
IF YOU NEED MORE TIME:
IF YOU NEED MORE TIME TO  PREPARE  YOUR  WRITTEN  RESPONSE,  YOU  SHOULD
APPEAR AT YOUR COURT DATE AND ASK THE JUDGE FOR MORE TIME.  YOU CAN ALSO
ASK THE JUDGE TO REFER YOU FOR LEGAL HELP.
IF YOU NEED LEGAL HELP:
YOU  MAY  SEEK LEGAL HELP FROM A PRIVATE ATTORNEY OR A LEGAL AID OFFICE.
SOME COURTS HAVE FREE  LEGAL  ASSISTANCE  PROGRAMS  FOR  PEOPLE  WITHOUT
LAWYERS.    YOU  CAN  FIND  RESOURCES ON THE NEW YORK STATE COURT SYSTEM
WEBSITE AT: ____________________.
  2. THE CLERK  PROMPTLY  SHALL  MAIL  TO  THE  DEFENDANT  THE  ENVELOPE
CONTAINING  THE  ADDITIONAL  NOTICE  SET  FORTH IN PARAGRAPH ONE OF THIS
SUBDIVISION AND NOTE THE DATE OF MAILING IN  THE  CASE  RECORD.  SUMMARY

S. 4827--D                          6

JUDGMENT SHALL NOT BE ENTERED BASED ON DEFENDANT'S FAILURE TO OPPOSE THE
MOTION  UNLESS  THERE HAS BEEN COMPLIANCE WITH THIS SECTION AND AT LEAST
FOURTEEN DAYS HAVE ELAPSED FROM THE DATE OF  MAILING  BY  THE  CLERK  OR
NINETEEN  DAYS  IF  THE  PLAINTIFF'S NOTICE OF MOTION DEMANDS ADDITIONAL
TIME UNDER SUBDIVISION (B) OF RULE 2214 OF THIS CHAPTER.
  3. THE CHIEF ADMINISTRATIVE JUDGE SHALL ISSUE A SPANISH TRANSLATION OF
THE NOTICE IN PARAGRAPH ONE OF THIS SUBDIVISION AND SHALL  MAINTAIN  AND
PUBLISH  THE  URL  ADDRESS  FOR  THE WEB PAGE CONTAINING CONSUMER CREDIT
RESOURCES FOR UNREPRESENTED LITIGANTS.
  § 10. Section 3213 of the civil practice law and rules, as amended  by
chapter 210 of the laws of 1969, is amended to read as follows:
  §  3213.  Motion  for  summary  judgment in lieu of complaint. When an
action is based upon an instrument for the payment of money only or upon
any judgment, the plaintiff may serve  with  the  summons  a  notice  of
motion  for  summary  judgment  and  the  supporting papers in lieu of a
complaint. The summons served with such motion papers shall require  the
defendant  to  submit  answering  papers  on  the motion within the time
provided in the notice of motion. The minimum time such motion shall  be
noticed  to be heard shall be as provided by subdivision (a) of rule 320
for making an appearance, depending upon the method of service.  If  the
plaintiff  sets  the  hearing  date of the motion later than the minimum
time therefor, he may require the defendant  to  serve  a  copy  of  his
answering  papers  upon  him  within  such  extended period of time, not
exceeding ten days, prior to such hearing date. No default judgment  may
be  entered  pursuant  to  subdivision  (a) of section 3215 prior to the
hearing date of the motion. If the motion  is  denied,  the  moving  and
answering papers shall be deemed the complaint and answer, respectively,
unless  the  court  orders  otherwise. THE ADDITIONAL NOTICE REQUIRED BY
SUBDIVISION (J) OF RULE 3212 SHALL BE APPLICABLE TO A MOTION MADE PURSU-
ANT TO THIS SECTION IN ANY ACTION TO COLLECT A DEBT  ARISING  OUT  OF  A
CONSUMER CREDIT TRANSACTION WHERE A CONSUMER IS A DEFENDANT.
  §  11.  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. THE CHIEF ADMINISTRATIVE JUDGE SHALL
ISSUE FORM AFFIDAVITS TO SATISFY THE REQUIREMENTS  OF  THIS  SUBDIVISION

S. 4827--D                          7

FOR  CONSUMER  CREDIT  TRANSACTIONS.  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)  AFFIDAVIT. A REQUEST FOR A DEFAULT JUDGMENT ENTERED BY THE CLERK,
MUST BE ACCOMPANIED BY AN AFFIDAVIT  BY  THE  PLAINTIFF  OR  PLAINTIFF'S
ATTORNEY  STATING THAT AFTER REASONABLE INQUIRY, HE OR SHE HAS REASON TO
BELIEVE THAT THE STATUTE OF LIMITATIONS HAS  NOT  EXPIRED.    THE  CHIEF
ADMINISTRATIVE JUDGE SHALL ISSUE FORM AFFIDAVITS TO SATISFY THE REQUIRE-
MENTS OF THIS SUBDIVISION FOR CONSUMER CREDIT TRANSACTIONS.
  §  12.  The  civil  practice  law and rules is amended by adding a new
section 7516 to read as follows:
  § 7516. 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
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.
  §  13. Subdivision 2 of section 212 of the judiciary law is amended by
adding a new paragraph (aa) to read as follows:
  (AA) NOT LATER THAN  JANUARY  FIRST,  TWO  THOUSAND  TWENTY-ONE,  MAKE
AVAILABLE  SPANISH  TRANSLATIONS  OF  THE ADDITIONAL NOTICES IN CONSUMER
CREDIT TRANSACTION ACTIONS AND PROCEEDINGS REQUIRED BY SECTION 306-D AND
SUBDIVISION (J) OF RULE 3212 OF THE CIVIL PRACTICE LAW  AND  RULES,  AND
MAKE  AVAILABLE  FORM AFFIDAVITS REQUIRED FOR A MOTION FOR DEFAULT JUDG-
MENT IN A CONSUMER CREDIT TRANSACTION ACTION OR PROCEEDING  REQUIRED  BY
SUBDIVISION (F) OF SECTION 3215 OF THE CIVIL PRACTICE LAW AND RULES.
  §  14. This act shall take effect immediately; provided, however, that
sections two, three, five, six, seven,  eight,  nine,  ten,  eleven  and
twelve shall take effect on the one hundred eightieth day after it shall
have  become  a law and shall apply to actions and proceedings commenced
on or after such date; and provided, further, that section four of  this
act  shall  take  effect  on the one hundred fiftieth day after this act
shall have become a law.

Co-Sponsors

view additional co-sponsors

S4827E (ACTIVE) - Details

See Assembly Version of this Bill:: A6909
Current Committee:: Senate Judiciary
Law Section:: Civil Practice Law and Rules
Laws Affected:: Amd CPLR, generally; amd §212, Judy L
Versions Introduced in Other Legislative Sessions:: 2013-2014: A2678
2015-2016: A3877, A4438
2017-2018: S8959, A1752
2021-2022: S153, A2382

S4827E (ACTIVE) - Summary

S4827E (ACTIVE) - Sponsor Memo

 
BILL NUMBER: S4827e

SPONSOR: THOMAS
 
TITLE OF BILL:

An act to amend the civil practice law and rules and the judiciary law,
in relation to consumer credit transactions

 
PURPOSE OF BILL:

This bill would strengthen consumer protections in consumer debt
collection proceedings.

 
SUMMARY OF PROVISIONS: OF BILL:

The bill would amend pleading requirements particular to consumer credit
actions by requiring that the complaint provide the name of the original
creditor, the last four digits of the account number printed on the most
recent monthly statement recording a purchase transaction, last payment,
or balance transfer, the date and amount of the last payment, an itemi-
zation of the amount sought, the account balance printed on the most

recent monthly statement recording a purchase transaction, last payment,
or balance transfer, and whether the plaintiff is the original creditor,
and if not, information about the sale and assignment of the debt. The
bill also requires that a copy of the contract or other written instru-
ment on which the action is based be attached to the complaint.

The bill would reduce the statute of limitations on consumer credit
actions from six years to three years.

The bill would permit defendants in consumer credit actions to raise
improper service as a defense in their answer and preserve that defense
for trial without having to file a separate motion to dismiss within 60
days as under current law.

It would require that an additional notice of a pending consumer credit
action be mailed to the defendant by the clerk of the court, with the
notice and mailing envelope provided by the plaintiff. This notice would
provide important information to the consumer credit defendant, includ-
ing the website address for consumer credit resources maintained by the
New York State Office of Court Administration. The chief administrative
judge would be required to make available Spanish translations of said
additional notices.

Similar in concept to the notice provided to the consumer upon commence-
ment of the action, the bill would require an additional notice advising
defendants in consumer credit actions against whom a summary judgment
motion has been made of the significance and consequence of such a
motion, and how to respond. It would also include the website address
for consumer credit resources maintained by the New York State Office of
Court Administration to assist consumer credit defendants in responding
to such motions.

To prevent the entry of default judgments on claims that lack merit, the
bill would require applications for default judgments in consumer credit
actions to conform with specific requirements. These include (1) an
affidavit by the original creditor of the facts constituting the debt,
the default in payment, the sale or assignment 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 entity, 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 plaintiff, which includes a chain
of title of the debt, completed by the plaintiff or plaintiff's witness.
The bill will also require that applications for default judgments in
consumer credit actions include a statement that after reason- able
inquiry, the plaintiff or its attorney has reason to believe that the
statute of limitations has not expired. Finally, the chief administra-
tive judge would be required to issue form affidavits for default
motions based upon consumer credit transactions, which would standardize
and make uniform the motion disposition process for the courts.

The bill would provide similarly exacting requirements for consumer
creditors who seek to enter judgment based upon an arbitration award.

Finally, the bill clarifies § CPLR 5019(c)applies only to judgment cred-
itors.

 
JUSTIFICATION:

There have been serious concerns reported about the growing problem of
abusive debt collection practices, including filing suit on debts that
are too old to be sued on, are a result of identity theft or are debts
that have been paid or otherwise discharged. Original creditors, such as
credit card issuers, routinely sell large portfolios of consumer debt
accounts to debt buyers, who regularly re-sell the debts. Minimal infor-
mation or documentation is transferred to debt purchasers. The process
makes it difficult for a consumer to identify the debt, the current
owner, or amount claimed and results in collection efforts that continue
for years, including lawsuits filed after the statute of limitations has
expired. There have been instances in which a consumer paid a debt, but
was later contacted by another debt buyer attempting to collect it.
Other reported concerns include lack of notice to the defendant of the
law suit resulting in a default judgment against the defendant without a
requirement to produce proof of the debt sued on. These default judg-
ments are collected through wage garnishment and bank account
restraints, which is often the first time a consumer learns that they
were sued. Stopping garnishment and unfreezing bank accounts requires
that the consumer take action in court, but rarely do consumers have
attorneys to help. It is especially burdensome given the limitations on
daily life and the health challenges related to the COVID-19 pandemic.

The devastating toll that abusive debt collection lawsuits take on
consumers is a longstanding and persistent problem identified by numer-
ous governmental and public policy institutions up through this day. In
its 2010 report, Repairing A Broken System: Protecting Consumers in Debt
Collection Litigation and Arbitration. the Federal Trade Commission
recommended state-level reforms similar to those contained in this bill.
In 2016, Human Rights Watch made similar recommendations in a study
called Rubber Stamp Justice, which incorporated data supplied by the New
York court system. Most recently, in May 2020 The PEW Charitable Trusts
issued How Debt Collectors Are Transforming the Business of State
Courts, which noted, among many other things: "Debt collection lawsuits
that end in default judgment can have lasting consequences for consum-
ers' economic stability."(Page 17.) PEW also recommended a review of
state policies to ensure that both sides can effectively present their
cases. This bill responds to these calls for better delivery of justice
to consumer defendants.
Abusive debt collection lawsuits exploit current gaps in our State's
civil procedure laws and rules. The proposed legislation helps to fill
those gaps. In doing so, this legislation will protect all consumers,
and will particularly help ameliorate some of the forms of economic
abuse, including identity theft, suffered by domestic violence victims
at the hands of their abusers.

At a hearing on economic abuse as a form of domestic abuse, held on
December 5, 2012, by the New York State Assembly Committees on Judiciary
and Codes, civil legal service providers, domestic violence prevention
advocates and the Office of Court Administration highlighted the insid-
ious and pervasive nature of various forms of economic abuse perpetrated
by abusers in the family violence context to exercise power and control
over their victims and their finances.  The types of abuse cited
included incurring debt in the survivor's name through false statements
or coercion, perpetrating identity theft or otherwise incurring debt
without the survivor's knowledge.  Witnesses at the hearing cited this
legislation as important and helpful to meliorating economic abuse
suffered by domestic abuse survivors.

This legislation requires statewide institution of additional notice
requirements that are presently in place through court rules and which
have indeed been helpful to consumer credit defendants, who rarely have
attorneys to represent them, even when they learn that they have been
sued. The notice provides basic understanding of the consequences of
legal actions taken against them and the importance of responding to the
lawsuit. It has also reduced the number of default judgments. There is a
significant and documented problem with faulty service that results in
default judgments with serious life-altering ramifications. Without
notice, defendants do not appear in court, and debt buyers easily obtain
default judgments. These judgments are enforced by freezing people's
bank accounts and garnishing their wages, hampering their ability to
then pay for basic necessities such as food, utilities, medication and
housing. These judgments appear are public records, making it close to
impossible for a consumer to secure housing or employment, or to take
out a loan. The provisions of this bill would protect all consumers and
domestic abuse survivors in particular, by ensuring that New Yorkers
receive actual notice of debt collection actions.

Current law allows debt collectors to provide minimal and vague informa-
tion in the complaint that initiates the case, making it very difficult
for consumers to identify the debt or the company collecting it. This
bill requires court papers to include more information about the debt
sued upon. This would ensure that all New Yorkers will be better able to
identify the debt on which they are being sued. There are many debts
that result from identity theft or mistaken identity and, in other situ-
ations the defend- ant may not recognize the debt as theirs from the
minimal information provided on the initial legal papers and may there-
fore not respond. This legislation will be particularly important for
domestic violence survivors as it will help them identify the debt and
assert defenses in cases involving debts they did not voluntarily incur
but that were incurred by their abusers in the survivor's name.

This legislation will reduce the statute of limitations for consumer
credit actions from six to three years. Reducing the statute of limita-
tions requires creditors to file their claims while memories are fresh
and records are still available. States with three year statutes of
limitation include: Arizona, Arkansas, Delaware, Kansas, Louisiana,
Maryland, Mississippi, Montana, and the District of Columbia. Pennsylva-
nia has a two-year statute of limitation.

Debt collection actions are rife with poor service of process as
confirmed in numerous studies and by New York governmental institutions.
Indeed, questionable service of process is the reason for the exceeding-
ly high number of default judgments in consumer credit actions. Because
consumer defendants rarely have attorneys, improper service is a defense
they often unknowingly waive when they finally discover they have been
sued, even though service of process is a requirement of due process
rights afforded under the United States Constitution. Current law places
time limits on a defendant's right to assert improper service as a
defense or to seek dismissal of the case on this basis. To protect
consumers from unknowingly waiving this legitimate defense, the bill
would allow consumer defendants to assert improper service as a defense
and seek dismissal of the lawsuit beyond the time limits in current law.

Debt collection actions are also rife with faulty documentation and
debts that are too old to be sued on. To ensure that default judgment
applications in debt collection lawsuits are evaluated on the merits,
and that default judgments are not entered on time-barred debts, this
bill requires plaintiffs seeking default judgments to provide basic
proof of the debt, its entitlement to judgment, and the timeliness of
the lawsuit. This includes an affidavit from the original creditor with
proof of the debt and the consumer's default in payment. If the debt was
sold, affidavits proving the sale must be submitted to show that the
plaintiff is the current owner entitled to obtain the judgment. To
protect consumers from the entry of judgment on time-barred debts, this
bill would require that applications for default judgments in consumer
credit actions include a statement that the creditor or its attorney has
reason to believe that the statute of limitations has not expired.

This legislation will benefit all consumers and for domestic violence
survivors, it will go a long way toward helping break the cycle of
violence and domestic abuse that enables perpetrators of domestic abuse
to exercise control over their victims and their finances in a manner
that prevents the victim from leaving a dangerous relationship or which
forces them to return to it.

 
LEGISLATIVE HISTORY:

2018: A.1752-A/S. 8959-A - A.Cal/S.Rules
2017: A.1752 - A. Cal.
2016: A.4438 - A. Judi
2015: A.4438 - A. Cal.
2013-14: Similar to A.9053/S.2454 - Passed Assembly/S. Judiciary
2011-12: Similar to A.633/5.677-A - Assembly Calendar/S. Judiciary
2010: A.7558-A/S. 4398-A - Passed Assembly/S. Finance
2009: A.7558-A/S. 439S-A - Passed Assembly/S. Codes

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
Immediately; provided, however, that sections two, three, five, six,
seven, eight, nine, ten, eleven and twelve shall take effect on the one
hundred eightieth day after it shall have become a law and shall apply
to actions and proceedings commenced on or after such date; and
provided, further, that section four of this act shall take effect on
the one hundred fiftieth day after this act shall have become a law.

S4827E (ACTIVE) - Bill Text download pdf


                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 4827--E

                       2019-2020 Regular Sessions

                            I N  S E N A T E

                             March 26, 2019
                               ___________

Introduced  by  Sens. THOMAS, BAILEY, CARLUCCI, FELDER, JACKSON, KAPLAN,
  KRUEGER, MAY, PERSAUD, RAMOS, SEPULVEDA  --  read  twice  and  ordered
  printed,  and when printed to be committed to the Committee on Judici-
  ary --  committee  discharged,  bill  amended,  ordered  reprinted  as
  amended  and  recommitted  to  said committee -- committee discharged,
  bill amended, ordered reprinted as amended  and  recommitted  to  said
  committee  --  recommitted to the Committee on Judiciary in accordance
  with Senate Rule 6, sec. 8  --  committee  discharged,  bill  amended,
  ordered  reprinted  as  amended  and  recommitted to said committee --
  committee discharged, bill amended, ordered reprinted as  amended  and
  recommitted  to  said committee -- committee discharged, bill amended,
  ordered reprinted as amended and recommitted to said committee

AN ACT to amend the civil practice law and rules and the judiciary  law,
  in relation to consumer 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".
  §  2.  Section  105  of the civil practice law and rules is amended by
adding two new subdivisions (h-1) and (q-1) to read as follows:
  (H-1) FINANCE CHARGE. THE TERM "FINANCE  CHARGE"  MEANS  THE  COST  OF
CONSUMER CREDIT AS A DOLLAR AMOUNT, INCLUDES ANY CHARGE PAYABLE DIRECTLY
OR  INDIRECTLY BY THE CONSUMER AND IMPOSED DIRECTLY OR INDIRECTLY BY THE
CREDITOR AS AN INCIDENT TO OR A CONDITION OF THE  EXTENSION  OF  CREDIT,
AND  DOES  NOT INCLUDE ANY CHARGE OF A TYPE PAYABLE IN A COMPARABLE CASH
TRANSACTION.
  (Q-1) ORIGINAL CREDITOR. THE TERM "ORIGINAL CREDITOR" MEANS THE ENTITY
THAT OWNED A CONSUMER CREDIT ACCOUNT AT THE DATE OF DEFAULT GIVING  RISE
TO A CAUSE OF ACTION.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00927-16-0

S. 4827--E                          2

  § 3. 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-I  of this article or article 2 of the uniform commer-
cial code or article 36-B of the general business law;
  § 4. The civil practice law and rules  is  amended  by  adding  a  new
section 214-i to read as follows:
  §  214-I.  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.  NOTWITHSTANDING
ANY  OTHER  PROVISION  OF  LAW,  WHEN  THE APPLICABLE LIMITATIONS PERIOD
EXPIRES, ANY SUBSEQUENT PAYMENT TOWARD, WRITTEN OR ORAL  AFFIRMATION  OF
OR  OTHER ACTIVITY ON THE DEBT DOES NOT REVIVE OR EXTEND THE LIMITATIONS
PERIOD.
  § 5. The civil practice law and rules  is  amended  by  adding  a  new
section 306-d to read as follows:
  §  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 MAY WISH TO CONTACT AN ATTORNEY.
  YOU SHOULD RESPOND TO THE LAWSUIT AS SOON AS  POSSIBLE  BY  FILING  AN
"ANSWER" WHICH MAY BE DONE AT THE COURT CLERK'S OFFICE LISTED ABOVE.
  IF  YOU  DO  NOT  RESPOND  TO THE LAWSUIT, THE COURT MAY ENTER A MONEY
JUDGMENT 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 MAY 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.

S. 4827--E                          3

ADDITIONAL INFORMATION CAN BE FOUND AT THE NEW YORK STATE  COURT  SYSTEM
WEBSITE.
SOURCES OF INFORMATION AND ASSISTANCE:
THE  COURT  ENCOURAGES  YOU  TO  INFORM YOURSELF ABOUT YOUR OPTIONS AS A
DEFENDANT IN THIS LAWSUIT. IN ADDITION  TO  SEEKING  ASSISTANCE  FROM  A
PRIVATE  ATTORNEY  OR  LEGAL AID OFFICE, THERE ARE FREE LEGAL ASSISTANCE
COMPUTER PROGRAMS THAT YOU CAN USE ONLINE TO HELP YOU REPRESENT YOURSELF
IN THIS LAWSUIT.
FOR FURTHER INFORMATION, OR TO LOCATE A LEGAL AID PROGRAM NEAR YOU,  YOU
MAY  VISIT  THE  LAWHELPNY  WEBSITE  OR  THE NEW YORK STATE COURT SYSTEM
WEBSITE, WHICH HAS INFORMATION FOR REPRESENTING YOURSELF  AND  LINKS  TO
OTHER RESOURCES AT: ___________________.
  (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-
BLE.  RECEIPT  OF THE ADDITIONAL NOTICE BY THE DEFENDANT DOES NOT CONFER
JURISDICTION ON THE COURT IN THE ABSENCE OF PROPER SERVICE OF PROCESS.
  (D) THE CHIEF ADMINISTRATIVE JUDGE SHALL ISSUE A  SPANISH  TRANSLATION
OF  THE NOTICE IN SUBDIVISION (A) OF THIS SECTION AND SHALL MAINTAIN AND
PUBLISH THE URL ADDRESS FOR THE WEB PAGE CONTAINING  CONSUMER  RESOURCES
FOR UNREPRESENTED LITIGANTS.
  §  6.  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.
  §  7.  Rule  3016  of  the  civil practice law and rules is amended by
adding a new subdivision (j) to read as follows:
  (J) 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, HOWEVER, FOR THE PURPOSES
OF THIS SECTION, IF THE ACCOUNT WAS  A  REVOLVING  CREDIT  ACCOUNT,  THE
CHARGE-OFF  STATEMENT  MAY  BE  ATTACHED TO THE COMPLAINT INSTEAD OF THE
CONTRACT OR OTHER WRITTEN  INSTRUMENT,  AND  THE  FOLLOWING  INFORMATION
SHALL BE SET FORTH IN THE COMPLAINT:
  (1) THE NAME OF THE ORIGINAL CREDITOR;
  (2)  THE  LAST  FOUR  DIGITS OF THE ACCOUNT NUMBER PRINTED ON THE MOST
RECENT MONTHLY STATEMENT RECORDING A PURCHASE TRANSACTION, LAST  PAYMENT
OR BALANCE TRANSFER;

S. 4827--E                          4

  (3)  THE  DATE  AND  AMOUNT  OF THE LAST PAYMENT OR, IF NO PAYMENT WAS
MADE, A STATEMENT THAT THE PURCHASER, BORROWER OR DEBTOR MADE NO PAYMENT
ON THE ACCOUNT;
  (4)  IF  THE  COMPLAINT CONTAINS A CAUSE OF ACTION BASED ON AN ACCOUNT
STATED, THE DATE ON OR ABOUT WHICH THE FINAL STATEMENT  OF  ACCOUNT  WAS
PROVIDED TO THE DEFENDANT;
  (5)  (A)  EXCEPT AS PROVIDED IN SUBPARAGRAPH (B) OF THIS PARAGRAPH, 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.
  (B) IF THE ACCOUNT WAS A REVOLVING CREDIT ACCOUNT, AN  ITEMIZATION  OF
THE  AMOUNT  SOUGHT,  BY:    (I)  THE TOTAL AMOUNT OF THE DEBT DUE AS OF
CHARGE-OFF; (II) THE TOTAL AMOUNT OF INTEREST ACCRUED SINCE  CHARGE-OFF;
(III)  THE  TOTAL  AMOUNT  OF NON-INTEREST CHARGES OR FEES ACCRUED SINCE
CHARGE-OFF; AND (IV) THE TOTAL AMOUNT OF PAYMENTS AND/OR CREDITS MADE ON
THE DEBT SINCE CHARGE-OFF;
  (6) THE ACCOUNT BALANCE PRINTED ON THE MOST RECENT  MONTHLY  STATEMENT
RECORDING A PURCHASE TRANSACTION, LAST PAYMENT OR BALANCE TRANSFER;
  (7) (A) WHETHER THE PLAINTIFF IS THE ORIGINAL CREDITOR.
  (B) 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 FROM  THE
ORIGINAL  CREDITOR  TO  THE PLAINTIFF AND THE DATE ON WHICH THE DEBT WAS
ASSIGNED TO THAT OWNER BY THE ORIGINAL CREDITOR OR SUBSEQUENT OWNER; AND
(III) THE AMOUNT DUE AT THE TIME OF THE SALE OR ASSIGNMENT OF  THE  DEBT
BY THE ORIGINAL CREDITOR; AND
  (8)  ANY  MATTERS REQUIRED TO BE STATED WITH PARTICULARITY PURSUANT TO
RULE 3015 OF THIS ARTICLE.
  § 8. 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; 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 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 TO COLLECT A DEBT ARISING OUT OF A CONSUMER
CREDIT TRANSACTION WHERE A CONSUMER IS A DEFENDANT OR 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

S. 4827--E                          5

under subdivision (a) OF THIS RULE,  he  or  she  does  not  raise  such
objection  in  the responsive pleading WHICH, IN ANY ACTION TO COLLECT A
DEBT ARISING OUT OF A CONSUMER CREDIT TRANSACTION WHERE A CONSUMER IS  A
DEFENDANT, INCLUDES ANY AMENDED RESPONSIVE PLEADING.
  §  9.  Rule  3212  of  the  civil practice law and rules is amended by
adding a new subdivision (j) to read as follows:
  (J) ADDITIONAL NOTICE IN ANY ACTION TO COLLECT A DEBT ARISING  OUT  OF
A CONSUMER CREDIT TRANSACTION WHERE A CONSUMER IS A DEFENDANT.
  1.  AT  THE  TIME  OF SERVICE OF A NOTICE OF MOTION ANY PART OF  WHICH
REQUESTS SUMMARY JUDGMENT IN WHOLE OR IN PART, WHERE THE   MOVING  PARTY
IS  A  PLAINTIFF AND THE RESPONDENT IS A CONSUMER DEFENDANT IN AN ACTION
TO COLLECT A DEBT ARISING OUT OF A   CONSUMER  CREDIT  TRANSACTION,  AND
WHERE THE CONSUMER DEFENDANT AGAINST  WHOM SUMMARY JUDGMENT IS SOUGHT IS
NOT  REPRESENTED BY AN ATTORNEY, THE PLAINTIFF SHALL SUBMIT TO THE CLERK
A STAMPED, UNSEALED ENVELOPE ADDRESSED TO THE  DEFENDANT  TOGETHER  WITH
THE  FOLLOWING ADDITIONAL NOTICE IN ENGLISH AND SPANISH TO BE PRINTED IN
CLEAR TYPE NO LESS THAN TWELVE-POINT IN SIZE:
                            IMPORTANT NOTICE
THE PLAINTIFF HAS ASKED THE COURT  TO  ENTER  JUDGMENT  AGAINST  YOU  BY
MAKING A MOTION FOR SUMMARY JUDGMENT.  KEEP THIS NOTICE AND THE ENVELOPE
IT  CAME  IN.  THE  MOTION FOR SUMMARY JUDGMENT WAS SEPARATELY SERVED ON
YOU.  TO AVOID ENTRY OF JUDGMENT:
(1) YOU MUST APPEAR IN COURT AS DIRECTED BELOW:
WHERE:  NAME OF COURT, STREET ADDRESS, ROOM NUMBER
WHEN:  DATE AND TIME
(2) YOU SHOULD OPPOSE THE MOTION IN WRITING.
HOW TO OPPOSE THE MOTION:
  (1) STATE THE LEGAL REASONS WHY THE COURT SHOULD  NOT  ENTER  JUDGMENT
AGAINST YOU, INCLUDING YOUR DEFENSES.
  (2) STATE THE FACTS THAT SUPPORT YOUR DEFENSES.
  (3) ATTACH AFFIDAVITS AND/OR EXHIBITS TO SUPPORT THE FACTS YOU ASSERT.
  (A)  AFFIDAVITS  ARE SWORN STATEMENTS OF WITNESSES (INCLUDING YOU) WHO
STATE FACTS THEY KNOW TO BE TRUE.  THE AFFIDAVIT SHOULD STATE THE  FACTS
AND  HOW THE WITNESS KNOWS THEM.  ALSO, THE AFFIDAVIT SHOULD EXPLAIN ANY
EXHIBITS.  AN AFFIDAVIT OF SERVICE IS AN AFFIDAVIT THAT STATES  HOW  AND
WHEN  PAPERS  WERE  SERVED.    AN AFFIDAVIT MUST BE SIGNED IN FRONT OF A
NOTARY. FREE FORMS ARE AVAILABLE ON THE  NEW  YORK  STATE  COURT  SYSTEM
WEBSITE AT: ____________________.
  (B) EXHIBITS ARE COPIES OF DOCUMENTS. EXHIBITS ARE USUALLY ATTACHED TO
AFFIDAVITS.
  (4)  HAVE SOMEONE (NOT YOU OR ANOTHER DEFENDANT IN THE LAWSUIT) MAIL A
COPY OF YOUR OPPOSITION TO THE PLAINTIFF'S ATTORNEY  BEFORE  YOUR  COURT
DATE AND HAVE THEM PREPARE AN AFFIDAVIT OF SERVICE BY MAIL.
  (5)  BRING  A  COPY OF YOUR OPPOSITION AND THE AFFIDAVIT OF SERVICE TO
YOUR COURT DATE.
  (6) ATTEND YOUR COURT DATE.
IF YOU NEED MORE TIME:
IF YOU NEED MORE TIME TO  PREPARE  YOUR  WRITTEN  RESPONSE,  YOU  SHOULD
APPEAR AT YOUR COURT DATE AND ASK THE JUDGE FOR MORE TIME.  YOU CAN ALSO
ASK THE JUDGE TO REFER YOU FOR LEGAL HELP.
IF YOU NEED LEGAL HELP:
YOU  MAY  SEEK LEGAL HELP FROM A PRIVATE ATTORNEY OR A LEGAL AID OFFICE.
SOME COURTS HAVE FREE  LEGAL  ASSISTANCE  PROGRAMS  FOR  PEOPLE  WITHOUT
LAWYERS.    YOU  CAN  FIND  RESOURCES ON THE NEW YORK STATE COURT SYSTEM
WEBSITE AT: ____________________.

S. 4827--E                          6

  2. THE CLERK  PROMPTLY  SHALL  MAIL  TO  THE  DEFENDANT  THE  ENVELOPE
CONTAINING  THE  ADDITIONAL  NOTICE  SET  FORTH IN PARAGRAPH ONE OF THIS
SUBDIVISION AND NOTE THE DATE OF MAILING IN  THE  CASE  RECORD.  SUMMARY
JUDGMENT SHALL NOT BE ENTERED BASED ON DEFENDANT'S FAILURE TO OPPOSE THE
MOTION  UNLESS  THERE HAS BEEN COMPLIANCE WITH THIS SECTION AND AT LEAST
FOURTEEN DAYS HAVE ELAPSED FROM THE DATE OF  MAILING  BY  THE  CLERK  OR
NINETEEN  DAYS  IF  THE  PLAINTIFF'S NOTICE OF MOTION DEMANDS ADDITIONAL
TIME UNDER SUBDIVISION (B) OF RULE 2214 OF THIS CHAPTER.
  3. THE CHIEF ADMINISTRATIVE JUDGE SHALL ISSUE A SPANISH TRANSLATION OF
THE NOTICE IN PARAGRAPH ONE OF THIS SUBDIVISION AND SHALL  MAINTAIN  AND
PUBLISH  THE  URL  ADDRESS  FOR  THE WEB PAGE CONTAINING CONSUMER CREDIT
RESOURCES FOR UNREPRESENTED LITIGANTS.
  § 10. Section 3213 of the civil practice law and rules, as amended  by
chapter 210 of the laws of 1969, is amended to read as follows:
  §  3213.  Motion  for  summary  judgment in lieu of complaint. When an
action is based upon an instrument for the payment of money only or upon
any judgment, the plaintiff may serve  with  the  summons  a  notice  of
motion  for  summary  judgment  and  the  supporting papers in lieu of a
complaint. The summons served with such motion papers shall require  the
defendant  to  submit  answering  papers  on  the motion within the time
provided in the notice of motion. The minimum time such motion shall  be
noticed  to be heard shall be as provided by subdivision (a) of rule 320
for making an appearance, depending upon the method of service.  If  the
plaintiff  sets  the  hearing  date of the motion later than the minimum
time therefor, he may require the defendant  to  serve  a  copy  of  his
answering  papers  upon  him  within  such  extended period of time, not
exceeding ten days, prior to such hearing date. No default judgment  may
be  entered  pursuant  to  subdivision  (a) of section 3215 prior to the
hearing date of the motion. If the motion  is  denied,  the  moving  and
answering papers shall be deemed the complaint and answer, respectively,
unless  the  court  orders  otherwise. THE ADDITIONAL NOTICE REQUIRED BY
SUBDIVISION (J) OF RULE 3212 SHALL BE APPLICABLE TO A MOTION MADE PURSU-
ANT TO THIS SECTION IN ANY ACTION TO COLLECT A DEBT  ARISING  OUT  OF  A
CONSUMER CREDIT TRANSACTION WHERE A CONSUMER IS A DEFENDANT.
  §  11.  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-

S. 4827--E                          7

TIFF, WHICH INCLUDES A CHAIN OF TITLE OF  THE  DEBT,  COMPLETED  BY  THE
PLAINTIFF  OR  PLAINTIFF'S WITNESS. THE CHIEF ADMINISTRATIVE JUDGE SHALL
ISSUE FORM AFFIDAVITS TO SATISFY THE REQUIREMENTS  OF  THIS  SUBDIVISION
FOR  CONSUMER  CREDIT  TRANSACTIONS.  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) AFFIDAVIT. A REQUEST FOR A DEFAULT JUDGMENT ENTERED BY THE  CLERK,
MUST  BE  ACCOMPANIED  BY  AN  AFFIDAVIT BY THE PLAINTIFF OR PLAINTIFF'S
ATTORNEY STATING THAT AFTER REASONABLE INQUIRY, HE OR SHE HAS REASON  TO
BELIEVE  THAT  THE  STATUTE  OF LIMITATIONS HAS NOT EXPIRED.   THE CHIEF
ADMINISTRATIVE JUDGE SHALL ISSUE FORM AFFIDAVITS TO SATISFY THE REQUIRE-
MENTS OF THIS SUBDIVISION FOR CONSUMER CREDIT TRANSACTIONS.
  § 12. The civil practice law and rules is  amended  by  adding  a  new
section 7516 to read as follows:
  §  7516.  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
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.
  § 13. Subdivision 2 of section 212 of the judiciary law is amended  by
adding a new paragraph (aa) to read as follows:
  (AA)  NOT  LATER  THAN  JANUARY  FIRST,  TWO THOUSAND TWENTY-ONE, MAKE
AVAILABLE SPANISH TRANSLATIONS OF THE  ADDITIONAL  NOTICES  IN  CONSUMER
CREDIT TRANSACTION ACTIONS AND PROCEEDINGS REQUIRED BY SECTION 306-D AND
SUBDIVISION  (J)  OF  RULE 3212 OF THE CIVIL PRACTICE LAW AND RULES, AND
MAKE AVAILABLE FORM AFFIDAVITS REQUIRED FOR A MOTION FOR  DEFAULT  JUDG-
MENT  IN  A CONSUMER CREDIT TRANSACTION ACTION OR PROCEEDING REQUIRED BY
SUBDIVISION (F) OF SECTION 3215 OF THE CIVIL PRACTICE LAW AND RULES.
  § 14. Subdivision (c) of section 5019 of the civil  practice  law  and
rules is amended to read as follows:
  (c) Change in judgment creditor.  A person other than the party recov-
ering  a  judgment who becomes entitled to enforce it, shall file in the
office of the clerk of the court in which the judgment was  entered  or,
in the case of a judgment of a court other than the supreme, county or a
family court which has been docketed by the clerk of the county in which
it  was  entered,  in  the  office  of  such county clerk, a copy of the
instrument on which his authority is based,  acknowledged  in  the  form
required to entitle a deed to be recorded, or, if his authority is based
on  a  court  order, a certified copy of the order. Upon such filing the
clerk shall make an appropriate entry on his  docket  of  the  judgment.
THIS  SUBDIVISION SHALL NOT APPLY WHEN THERE IS A CHANGE TO THE OWNER OF
A DEBT THROUGH A SALE, ASSIGNMENT, OR OTHER TRANSFER WHERE  NO  JUDGMENT
EXISTS.

S. 4827--E                          8

  §  15. This act shall take effect immediately; provided, however, that
sections two, three, five, six, seven,  eight,  nine,  ten,  eleven  and
twelve shall take effect on the one hundred eightieth day after it shall
have  become  a law and shall apply to actions and proceedings commenced
on  or after such date; and provided, further, that section four of this
act shall take effect on the one hundred fiftieth  day  after  this  act
shall have become a law.

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The New York State Senate

senate Bill S4827E

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senate Bill S4827E

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