Bill Text: NY A00633 | 2011-2012 | General Assembly | Introduced
Bill Title: Enacts the "consumer credit fairness act"; establishes a 3 year statute of limitations for commencement of a cause of action arising out of a consumer credit transaction where the defendant is a purchaser, borrower or debtor; establishes a notice of lawsuit which must be mailed to the defendant in such a cause of action; establishes certain requirements for the complaint in such an action; provides for arbitration of such actions.
Spectrum: Partisan Bill (Democrat 27-0)
Status: (Introduced - Dead) 2012-05-24 - advanced to third reading cal.617 [A00633 Detail]
Download: New_York-2011-A00633-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
633
2011-2012 Regular Sessions
I N A S S E M B L Y
(PREFILED)
January 5, 2011
___________
Introduced by M. of A. WEINSTEIN, WRIGHT, JAFFEE, BOYLAND, MILLMAN,
TITUS, GIBSON -- Multi-Sponsored by -- M. of A. CYMBROWITZ, 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:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "consumer credit fairness act".
3 S 2. Subdivision 2 of section 213 of the civil practice law and rules,
4 as amended by chapter 709 of the laws of 1988, is amended to read as
5 follows:
6 2. an action upon a contractual obligation or liability, express or
7 implied, except as provided in section two hundred thirteen-a OR TWO
8 HUNDRED FOURTEEN-F of this article or article 2 of the uniform commer-
9 cial code or article 36-B of the general business law;
10 S 3. The civil practice law and rules is amended by adding a new
11 section 214-f to read as follows:
12 S 214-F. CERTAIN ACTIONS ARISING OUT OF CONSUMER CREDIT TRANSACTIONS
13 TO BE COMMENCED WITHIN THREE YEARS. AN ACTION ARISING OUT OF A CONSUMER
14 CREDIT TRANSACTION WHERE A PURCHASER, BORROWER OR DEBTOR IS A DEFENDANT
15 MUST BE COMMENCED WITHIN THREE YEARS, EXCEPT AS PROVIDED IN SECTION TWO
16 HUNDRED THIRTEEN-A OF THIS ARTICLE OR ARTICLE 2 OF THE UNIFORM COMMER-
17 CIAL CODE OR ARTICLE 36-B OF THE GENERAL BUSINESS LAW. WHEN THE PERIOD
18 WITHIN WHICH AN ACTION MAY BE COMMENCED UNDER THIS SECTION HAS EXPIRED,
19 THE RIGHT TO COLLECT CONSUMER CREDIT DEBT IS EXTINGUISHED AS WELL AS THE
20 REMEDY.
21 FOR PURPOSES OF THIS SECTION, "THE RIGHT TO COLLECT CONSUMER CREDIT
22 DEBT" SHALL MEAN ANY ATTEMPTS BY THE CREDITOR, THIRD PARTY PURCHASER, OR
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01288-01-1
A. 633 2
1 OTHER AUTHORIZED THIRD PARTY TO COLLECT SUCH DEBT INCLUDING, BUT NOT
2 LIMITED TO, CALLS, MAIL OR OTHER ATTEMPTS TO COLLECT.
3 S 4. The civil practice law and rules is amended by adding a new
4 section 306-c to read as follows:
5 S 306-C. ADDITIONAL MAILING OF NOTICE IN AN ACTION ARISING OUT OF A
6 CONSUMER CREDIT TRANSACTION. 1. AT THE TIME OF FILING WITH THE CLERK OF
7 THE PROOF OF SERVICE OF THE SUMMONS AND COMPLAINT IN AN ACTION ARISING
8 OUT OF A CONSUMER CREDIT TRANSACTION, THE PLAINTIFF SHALL SUBMIT TO THE
9 CLERK A STAMPED ENVELOPE ADDRESSED TO THE DEFENDANT TOGETHER WITH A
10 WRITTEN NOTICE IN CLEAR TYPE OF NO LESS THAN TWELVE-POINT IN SIZE, IN
11 BOTH ENGLISH AND SPANISH, AND CONTAINING THE FOLLOWING LANGUAGE:
12 NOTICE OF LAWSUIT
13 (DATE)
14 (NAME OF COURT)
15 (COUNTY)
16 (STREET ADDRESS, ROOM NUMBER)
17 (CITY, STATE, ZIP CODE)
18 (NAME OF DEFENDANT)
19 (ADDRESS OF DEFENDANT)
20 PLAINTIFF:__________________________________
21 DEFENDANT:__________________________________
22 NAME OF ORIGINAL CREDITOR, UNLESS SAME:______________________________
23 INDEX NUMBER:_______________________________
24 ATTENTION: A LAWSUIT HAS BEEN FILED AGAINST YOU CLAIMING THAT YOU OWE
25 MONEY FOR AN UNPAID CREDIT CARD, MEDICAL, STUDENT LOAN OR OTHER DEBT.
26 YOU SHOULD GO TO THE COURT CLERK'S OFFICE AT THE ABOVE ADDRESS AS SOON
27 AS POSSIBLE TO RESPOND TO THE LAWSUIT. YOU MAY WISH TO CONTACT AN ATTOR-
28 NEY. IF YOU DO NOT HAVE AN ATTORNEY, HELP IS AVAILABLE AT THE COURT.
29 IF YOU DO NOT RESPOND TO THE LAWSUIT, THE COURT MAY ENTER A JUDGMENT
30 AGAINST YOU. ONCE ENTERED, A JUDGMENT IS GOOD AND CAN BE USED AGAINST
31 YOU FOR TWENTY YEARS, AND YOUR MONEY, INCLUDING A PORTION OF YOUR
32 PAYCHECK AND/OR BANK ACCOUNT, MAY BE TAKEN. ALSO, A JUDGMENT WILL HURT
33 YOUR CREDIT SCORE AND CAN AFFECT YOUR ABILITY TO RENT A HOME, FIND A
34 JOB, OR TAKE OUT A LOAN.
35 YOU CANNOT BE ARRESTED OR SENT TO JAIL FOR OWING A DEBT.
36 IT IS IMPORTANT THAT YOU GO TO THE COURT CLERK'S OFFICE LISTED ABOVE AND
37 BRING THIS NOTICE WITH YOU. ADDITIONAL INFORMATION CAN BE FOUND AT THE
38 COURT SYSTEM WEBSITE AT: WWW.COURTS.STATE.NY.US
39 2. THE FACE OF THE ENVELOPE SHALL BE ADDRESSED TO THE DEFENDANT AT THE
40 ADDRESS AT WHICH PROCESS WAS SERVED, AND SHALL CONTAIN THE DEFENDANT'S
41 NAME, ADDRESS (INCLUDING APARTMENT NUMBER) AND ZIP CODE. THE FACE OF THE
42 ENVELOPE ALSO SHALL STATE THE APPROPRIATE CLERK'S OFFICE AS ITS RETURN
43 ADDRESS.
44 3. THE CLERK PROMPTLY SHALL MAIL TO THE DEFENDANT THE ENVELOPE
45 CONTAINING THE ADDITIONAL NOTICE SET FORTH IN SUBDIVISION ONE OF THIS
46 SECTION. NO DEFAULT JUDGMENT BASED ON THE DEFENDANT'S FAILURE TO ANSWER
47 SHALL BE ENTERED UNLESS THERE HAS BEEN COMPLIANCE WITH THIS SECTION, AND
48 AT LEAST TWENTY DAYS HAVE ELAPSED FROM THE DATE OF MAILING BY THE CLERK.
49 S 5. Subdivision (a) of section 3012 of the civil practice law and
50 rules is amended to read as follows:
51 (a) Service of pleadings. The complaint may be served with the
52 summons, EXCEPT THAT IN AN ACTION ARISING OUT OF A CONSUMER CREDIT TRAN-
A. 633 3
1 SACTION, THE COMPLAINT SHALL BE SERVED WITH THE SUMMONS. A subsequent
2 pleading asserting new or additional claims for relief shall be served
3 upon a party who has not appeared in the manner provided for service of
4 a summons. In any other case, a pleading shall be served in the manner
5 provided for service of papers generally. Service of an answer or reply
6 shall be made within twenty days after service of the pleading to which
7 it responds.
8 S 6. Rule 3016 of the civil practice law and rules is amended by
9 adding a new subdivision (i) to read as follows:
10 (I) CONSUMER CREDIT TRANSACTIONS. IN AN ACTION ARISING OUT OF A
11 CONSUMER CREDIT TRANSACTION WHERE A PURCHASER, BORROWER OR DEBTOR IS A
12 DEFENDANT, THE CONTRACT OR OTHER WRITTEN INSTRUMENT ON WHICH THE ACTION
13 IS BASED SHALL BE ATTACHED TO THE COMPLAINT AND THE FOLLOWING INFORMA-
14 TION SHALL BE SET FORTH IN THE COMPLAINT:
15 1. THE NAME OF THE ORIGINAL CREDITOR;
16 2. THE LAST FOUR DIGITS OF THE ORIGINAL ACCOUNT NUMBER;
17 3. THE DATE AND AMOUNT OF THE LAST PAYMENT;
18 4. IF THE COMPLAINT CONTAINS A CAUSE OF ACTION BASED ON AN ACCOUNT
19 STATED, THE DATE THAT THE FINAL STATEMENT OF ACCOUNT WAS MAILED TO THE
20 DEFENDANT;
21 5. AN ITEMIZATION OF THE AMOUNT SOUGHT, BY (I) PRINCIPAL; (II) FINANCE
22 CHARGE OR CHARGES; (III) FEES IMPOSED BY THE ORIGINAL CREDITOR; (IV)
23 COLLECTION COSTS; (V) ATTORNEY'S FEES; (VI) INTEREST; AND (VII) ANY
24 OTHER FEES AND CHARGES. THE TERM "FINANCE CHARGE" MEANS A FINANCE CHARGE
25 AS DEFINED IN REGULATION Z, 12 C.F.R. S 226.4.
26 6. WHETHER THE PLAINTIFF IS THE ORIGINAL CREDITOR. IF THE PLAINTIFF IS
27 NOT THE ORIGINAL CREDITOR, THE COMPLAINT SHALL STATE (I) THE DATE ON
28 WHICH THE DEBT WAS ASSIGNED TO THE PLAINTIFF; AND (II) THE NAME OF EACH
29 PREVIOUS OWNER OF THE ACCOUNT AND THE DATE ON WHICH THE DEBT WAS
30 ASSIGNED TO THAT OWNER.
31 7. ANY MATTERS REQUIRED TO BE STATED WITH PARTICULARITY PURSUANT TO
32 RULE 3015 OF THIS ARTICLE.
33 S 7. Subdivision (e) of rule 3211 of the civil practice law and rules,
34 as amended by chapter 616 of the laws of 2005, is amended to read as
35 follows:
36 (e) Number, time and waiver of objections; motion to plead over. At
37 any time before service of the responsive pleading is required, a party
38 may move on one or more of the grounds set forth in subdivision (a) OF
39 THIS SECTION, and no more than one such motion shall be permitted. Any
40 objection or defense based upon a ground set forth in paragraphs one,
41 three, four, five and six of subdivision (a) OF THIS SECTION is waived
42 unless raised either by such motion or in the responsive pleading. A
43 motion based upon a ground specified in paragraph two, seven or ten of
44 subdivision (a) OF THIS SECTION may be made at any subsequent time or in
45 a later pleading, if one is permitted; IN ANY ACTION OTHER THAN AN
46 ACTION ARISING OUT OF A CONSUMER CREDIT TRANSACTION WHERE A PURCHASER,
47 BORROWER OR DEBTOR IS A DEFENDANT, an objection that the summons and
48 complaint, summons with notice, or notice of petition and petition was
49 not properly served is waived if, having raised such an objection in a
50 pleading, the objecting party does not move for judgment on that ground
51 within sixty days after serving the pleading, unless the court extends
52 the time upon the ground of undue hardship. The foregoing sentence shall
53 not apply in any proceeding under subdivision one or two of section
54 seven hundred eleven of the real property actions and proceedings law.
55 The papers in opposition to a motion based on improper service shall
56 contain a copy of the proof of service, whether or not previously filed.
A. 633 4
1 An objection based upon a ground specified in paragraph eight or nine of
2 subdivision (a) OF THIS SECTION is waived if a party moves on any of the
3 grounds set forth in subdivision (a) OF THIS SECTION without raising
4 such objection or if, having made no objection under subdivision (a) OF
5 THIS SECTION, he or she does not raise such objection in the responsive
6 pleading.
7 S 8. Subdivision (f) of section 3215 of the civil practice law and
8 rules, as amended by chapter 453 of the laws of 2006, is amended and a
9 new subdivision (j) is added to read as follows:
10 (f) Proof. On any application for judgment by default, the applicant
11 shall file proof of service of the summons and the complaint, or a
12 summons and notice served pursuant to subdivision (b) of rule 305 or
13 subdivision (a) of rule 316 of this chapter, and proof of the facts
14 constituting the claim, the default and the amount due by affidavit made
15 by the party, or where the state of New York is the plaintiff, by affi-
16 davit made by an attorney from the office of the attorney general who
17 has or obtains knowledge of such facts through review of state records
18 or otherwise. Where a verified complaint has been served, it may be used
19 as the affidavit of the facts constituting the claim and the amount due;
20 in such case, an affidavit as to the default shall be made by the party
21 or the party's attorney. IN AN ACTION ARISING OUT OF A CONSUMER CREDIT
22 TRANSACTION, IF THE PLAINTIFF IS NOT THE ORIGINAL CREDITOR, THE APPLI-
23 CANT SHALL INCLUDE: (I) AN AFFIDAVIT BY THE ORIGINAL CREDITOR OF THE
24 FACTS CONSTITUTING THE DEBT, THE DEFAULT IN PAYMENT, THE SALE OR ASSIGN-
25 MENT OF THE DEBT, AND THE AMOUNT DUE AT THE TIME OF SALE OR ASSIGNMENT;
26 (II) FOR EACH SUBSEQUENT ASSIGNMENT OR SALE OF THE DEBT TO ANOTHER ENTI-
27 TY, AN AFFIDAVIT OF SALE OF THE DEBT BY THE DEBT SELLER, COMPLETED BY
28 THE SELLER OR ASSIGNOR; AND (III) AN AFFIDAVIT OF A WITNESS OF THE
29 PLAINTIFF, WHICH INCLUDES A CHAIN OF TITLE OF THE DEBT, COMPLETED BY THE
30 PLAINTIFF OR PLAINTIFF'S WITNESS. When jurisdiction is based on an
31 attachment of property, the affidavit must state that an order of
32 attachment granted in the action has been levied on the property of the
33 defendant, describe the property and state its value. Proof of mailing
34 the notice required by subdivision (g) of this section, where applica-
35 ble, shall also be filed.
36 (J) A REQUEST FOR A DEFAULT JUDGMENT ENTERED BY THE CLERK, MUST BE
37 ACCOMPANIED BY AN AFFIDAVIT BY THE DEBT COLLECTOR (WHO MAY BE THE PLAIN-
38 TIFF OR PLAINTIFF'S ATTORNEY) STATING THAT AFTER REASONABLE INQUIRY, HE
39 OR SHE HAS REASON TO BELIEVE THAT THE STATUTE OF LIMITATIONS HAS NOT
40 EXPIRED.
41 S 9. The civil practice law and rules is amended by adding a new
42 section 7515 to read as follows:
43 S 7515. CONFIRMATION OF AN AWARD BASED ON A CONSUMER CREDIT TRANS-
44 ACTION. IN ANY PROCEEDING UNDER SECTION 7510 OF THIS ARTICLE TO CONFIRM
45 AN AWARD BASED ON A CONSUMER CREDIT TRANSACTION, THE PARTY SEEKING TO
46 CONFIRM THE AWARD SHALL PLEAD THE ACTUAL TERMS AND CONDITIONS OF THE
47 AGREEMENT TO ARBITRATE. THE PARTY SHALL ATTACH TO ITS PETITION (1) THE
48 AGREEMENT TO ARBITRATE; (2) THE DEMAND FOR ARBITRATION OR NOTICE OF
49 INTENTION TO ARBITRATE, WITH PROOF OF SERVICE; AND (3) THE ARBITRATION
50 AWARD, WITH PROOF OF SERVICE. IF THE AWARD DOES NOT CONTAIN A STATEMENT
51 OF THE CLAIMS SUBMITTED FOR ARBITRATION, OF THE CLAIMS RULED UPON BY THE
52 ARBITRATOR, AND OF THE CALCULATION OF FIGURES USED BY THE ARBITRATOR IN
53 ARRIVING AT THE AWARD, THEN THE PETITION SHALL CONTAIN SUCH A STATEMENT.
54 THE COURT SHALL NOT GRANT CONFIRMATION OF AN AWARD BASED ON A CONSUMER
55 CREDIT TRANSACTION UNLESS THE PARTY SEEKING TO CONFIRM THE AWARD HAS
56 COMPLIED WITH THIS SECTION.
A. 633 5
1 S 10. This act shall take effect on the first of January next succeed-
2 ing the date on which it shall have become a law, except that section
3 three of this act shall take effect on the one hundred eightieth day
4 after this act shall have become a law.
