Bill Text: NY A03155 | 2023-2024 | General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Enacts protections for private education loan borrowers and cosigners; requires certain notifications from creditors and debt collectors; prohibits acceleration; enacts provisions for cosigner release.
Spectrum: Partisan Bill (Democrat 8-0)
Status: (Introduced - Dead) 2024-06-04 - substituted by s362a [A03155 Detail]
Download: New_York-2023-A03155-Introduced.html
Bill Title: Enacts protections for private education loan borrowers and cosigners; requires certain notifications from creditors and debt collectors; prohibits acceleration; enacts provisions for cosigner release.
Spectrum: Partisan Bill (Democrat 8-0)
Status: (Introduced - Dead) 2024-06-04 - substituted by s362a [A03155 Detail]
Download: New_York-2023-A03155-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 3155 2023-2024 Regular Sessions IN ASSEMBLY February 2, 2023 ___________ Introduced by M. of A. ZEBROWSKI, SIMON, FORREST -- read once and referred to the Committee on Consumer Affairs and Protection AN ACT to amend the general business law and the civil practice law and rules, in relation to protecting private education loan borrowers and cosigners The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The general business law is amended by adding a new article 2 42 to read as follows: 3 ARTICLE 42 4 PRIVATE EDUCATION LOAN PROTECTIONS 5 Section 1100. Definitions. 6 1101. Applicability. 7 1102. Exempt organizations. 8 1103. Provisions applicable to cosigners. 9 1104. Prohibition on acceleration of payments on private educa- 10 tion loans. 11 1105. Required communications from creditors and debt collec- 12 tors. 13 1106. Required information to be provided by creditors and debt 14 collectors. 15 1107. Enforcement. 16 1108. Rules and regulations. 17 1109. Penalties. 18 § 1100. Definitions. As used in this article: 19 1. "Private education loan" means an extension of credit that: 20 (a) is not made, insured, or guaranteed under title IV of the Higher 21 Education Act of 1965 (20 U.S.C. 1070 et seq.); 22 (b) is extended to a consumer expressly, in whole or in part, for 23 higher education expenses, regardless of whether the loan is provided by 24 the educational institution that the student attends; EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD01638-01-3A. 3155 2 1 (c) does not include open-end credit or any loan that is secured by 2 real property or a dwelling; and 3 (d) does not include an extension of credit in which the covered 4 educational institution is the creditor if: 5 (i) the term of the extension of credit is ninety days or less; or 6 (ii) an interest rate or finance charge will not be applied to the 7 credit balance and the term of the extension of credit is one year or 8 less, even if the credit is payable in more than four installments. 9 2. "Private education lender", except as exempted under this article, 10 means: 11 (a) any person or entity engaged in the business of securing, making, 12 or extending private education loans; or 13 (b) any holder of a private education loan. 14 3. "Borrower" or "private education loan borrower" means a person who 15 has received or agreed to pay a private education loan for his or her 16 own educational expenses. 17 4. "Cosigner" (a) means: 18 (i) any individual who is liable for the obligation of another without 19 compensation, regardless of how designated in the contract or instrument 20 with respect to that obligation, including an obligation under a private 21 education loan extended to consolidate a borrower's pre-existing private 22 education loans; and 23 (ii) includes any person the signature of which is requested as condi- 24 tion to grant credit or to forbear on collection; 25 (b) does not include a spouse of an individual described in subpara- 26 graph (i) of paragraph (a) of this subdivision, the signature of whom is 27 needed to perfect the security interest in a loan. 28 5. "Original creditor" means the private education lender identified 29 in a promissory note, loan agreement, or loan contract entered into with 30 a private education loan borrower or cosigner. 31 6. "Creditor" means: 32 (a) the original creditor, where ownership of a private education loan 33 debt has not been sold, assigned, or transferred; 34 (b) the person or entity that owned the private education loan debt at 35 the time the debt became delinquent or defaulted, even if that person or 36 entity did not originate the private education loan, and where such a 37 debt has not subsequently been sold, transferred or assigned; or 38 (c) a person or entity that purchased a delinquent or defaulted 39 private education loan debt for collection purposes, whether it collects 40 the debt itself, hires a third party for collection, or hires an attor- 41 ney for collection litigation. 42 7. "Debt collector" means any person who regularly collects or 43 attempts to collect, directly or indirectly, consumer debts originally 44 owed or due or asserted to be owed or due another. The term does not 45 include any officer or employee of a creditor who, in the name of the 46 creditor, collects debts for such creditor, but it does include any 47 creditor who, in the process of collecting its own debts, uses any name 48 other than its own which would indicate that a third person is collect- 49 ing or attempting to collect such debts. 50 8. "Higher education expense" means any expense arising from higher 51 education, as defined in section two of the education law, regardless of 52 whether the higher education institution is accredited within New York 53 state. 54 § 1101. Applicability. 1. Any person or entity that enters into a 55 contract or subcontract with a private education lender or servicer toA. 3155 3 1 perform the servicing of a private education loan must fulfill the obli- 2 gations of the private education lender under this article. 3 2. Any private education lender as described in subdivision two of 4 section eleven hundred of this article be jointly and severally liable 5 for the actions of the entity or person in fulfilling the obligations of 6 the private educational lender or servicer under this article. 7 § 1102. Exempt organizations. The following shall be exempt from the 8 provisions of this article only to the extent that state regulation is 9 preempted by federal law: 10 1. Any banking organization, foreign banking corporation, national 11 bank, federal savings association, federal credit union, or any bank, 12 trust company, savings bank, savings and loan association, or credit 13 union organized under the laws of any other state; and 14 2. Any subsidiary of such entities set forth in subdivision one of 15 this section. 16 § 1103. Provisions applicable to cosigners. 1. (a) Prior to the origi- 17 nation of a private education loan, the private education lender shall 18 provide to all cosigner applicants information about the rights and 19 responsibilities of the cosigner of the loan, including: 20 (i) information about how the private education lender will furnish 21 information about the cosigner's private education loan obligation to 22 credit reporting agencies; 23 (ii) information about how the cosigner will be notified if the 24 private education loan becomes delinquent, including how the cosigner 25 can cure the delinquency in order to avoid negative credit furnishing 26 and loss of cosigner release eligibility; and 27 (iii) information about eligibility for release of the cosigner's 28 obligation on the private education loan, including number of on-time 29 payments and any other criteria required to approve the release of 30 cosigner from the loan obligation. 31 (b) Lenders shall send borrowers and cosigners annual written notices 32 containing information about cosigner release, including criteria the 33 lender requires to approve the release of cosigner from the loan obli- 34 gation and the process for applying for cosigner release. 35 (c) Once the borrower has met the applicable consecutive on-time 36 payment requirement to be eligible for cosigner release, the lender 37 shall send the borrower and cosigner a written notification by U.S. mail 38 and by electronic mail, where a borrower has elected to receive elec- 39 tronic communications from the lender, informing the borrower and cosig- 40 ner that he or she has met the applicable consecutive, on-time payments 41 requirement to be eligible for cosigner release. The notification shall 42 also include information about any additional criteria to qualify for 43 cosigner release, and the procedure to apply for cosigner release. 44 (d) Lenders shall provide written notice within fifteen days to any 45 borrower who applies for cosigner release, but whose application is 46 incomplete. The written notice must include a description of the infor- 47 mation needed to consider the application complete and the date by which 48 the applicant should furnish the missing information. 49 (e) After a borrower submits a complete application for cosigner 50 release, within thirty days, the lender shall send the borrower and 51 cosigner a written notice that informs the borrower and cosigner whether 52 the cosigner release application has been approved or denied. If the 53 lender denies a request for cosigner release, the lender shall inform 54 the borrower of his or her right to request all documents and informa- 55 tion used in the determination, including the credit score threshold 56 used by the lender, the borrower's consumer report, the borrower's cred-A. 3155 4 1 it score, and any other documents specific to the borrower. The lender 2 must also provide any adverse action notices required under applicable 3 federal law if the denial is based in whole or in part on any informa- 4 tion contained in a consumer report. 5 2. (a) In response to any written or oral request for cosigner 6 release, lenders shall send the information described in paragraph (b) 7 of subdivision one of this section. 8 (b) Lenders shall not impose any restrictions that may permanently bar 9 a borrower from qualifying for cosigner release, including restricting 10 the number of times a borrower may apply for cosigner release. 11 (c) Lenders shall not impose any negative consequences on any borrower 12 or cosigner during the sixty days following the issuance of the notice 13 required under paragraph (d) of subdivision one of this section, or 14 until the lender makes a final determination about a borrower's cosigner 15 release application. For the purpose of this paragraph, "negative conse- 16 quences" includes, but is not limited to, the imposition of additional 17 eligibility criteria, negative credit reporting, lost eligibility for 18 cosigner release, late fees, interest capitalization, or other financial 19 injury. 20 (d) Lenders shall not require greater than twelve consecutive, on-time 21 payments as criteria to apply for cosigner release. Any borrower who has 22 paid the equivalent of twelve months of principal and interest payments 23 within any twelve-month period will be considered to have satisfied the 24 consecutive, on-time payment requirement, even if the borrower has not 25 made payments monthly during the twelve-month period. 26 (e) If a borrower or cosigner requests a change that restarts the 27 count of consecutive, on-time payments required for cosigner release, 28 the lender shall notify the borrower and cosigner in writing within ten 29 days of the impact of such an arrangement and provide the borrower or 30 cosigner the right to withdraw or reverse the request to avoid such 31 impact. 32 (f) The borrower has the right to request an appeal of a lender's 33 determination to deny the cosigner release application within ninety 34 days of receiving the lender's determination, and the lender shall 35 permit such borrower to submit additional documentation evidencing that 36 the borrower has the ability, willingness, and stability to handle his 37 or her payment obligations. The borrower may request review of the 38 cosigner release determination by another employee. The lender shall 39 inform the borrower of this right in a clear and conspicuous manner on 40 the notice denying the cosigner release application. 41 (g) A lender must establish and maintain a comprehensive record 42 management system reasonably designed to ensure the accuracy, integrity, 43 and completeness of data and other information about cosigner release 44 applications. This system shall include the number of cosigner release 45 applications received, the approval and denial rate, and the primary 46 reasons for any denial. 47 (h) If a cosigner has a total and permanent disability, as determined 48 by any federal agency, state agency, or physician or doctor of osteopa- 49 thy legally authorized to practice in the state in which the cosigner 50 resides, the lender shall release the cosigner from the cosigner's obli- 51 gation to repay the loan upon receiving a notification of the cosigner's 52 total and permanent disability. The lender shall not require a new 53 cosigner to be added to the loan after the original cosigner has been 54 released from the loan.A. 3155 5 1 3. (a) A lender shall provide a cosigner of a private education loan 2 with access to all documents or records related to the cosigned private 3 education loan that are available to the borrower; 4 (b) If a lender provides electronic access to documents and records 5 for a borrower, it shall provide equivalent electronic access to the 6 cosigner; and 7 (c) Upon receiving notice from the borrower or cosigner, the lender 8 shall redact the contact information of the other party. 9 § 1104. Prohibition on acceleration of payments on private education 10 loans. 1. Except as provided in subdivision two of this section, a 11 private education loan executed after the effective date of this article 12 may not include a provision that permits the private educational lender 13 to accelerate, in whole or in part, payments on the private education 14 loan. 15 2. A private education loan may include a provision that permits 16 acceleration of the loan in cases of payment default. 17 3. A lender shall not place any loan or account into default or accel- 18 erate a loan for any reason, other than for failure to pay. 19 4. (a) In the event of the death of a cosigner, a lender shall not 20 attempt to collect against the cosigner's estate, other than for failure 21 to pay. 22 (b) Upon receiving notification of the death or bankruptcy of a cosig- 23 ner, when the loan is not more than sixty days delinquent at the time of 24 the notification, a lender shall not change any terms or benefits under 25 the promissory note, repayment schedule, repayment terms, or monthly 26 payment amount or any other provision associated with the loan. 27 (c) A lender shall not place any loan or account into default or 28 accelerate a loan for any reason, other than for failure to pay. 29 § 1105. Required communications from creditors and debt collectors. 30 In addition to any other information required under applicable federal 31 or state law, a creditor or debt collector shall provide, in writing, in 32 the first debt collection communication with the private education loan 33 borrower or cosigner, or within five days thereafter, and at any other 34 time the borrower or cosigner requests such documentation: 35 1. The name of the current owner of the private education loan debt; 36 2. The original creditor's name at the time of origination and, if 37 different, at the time of sale of the loan, if applicable; 38 3. The original creditor's account number used to identify the private 39 education loan debt at the time of sale, if applicable; 40 4. The total outstanding amount owed at the time of default or the 41 amount due to bring the loan current if the loan is delinquent, but not 42 yet in default; 43 5. A schedule of all transactions credited or debited to the private 44 education loan account; 45 6. A copy of all pages of the contract, application or other documents 46 stating all terms and conditions applicable to the private education 47 loan and evidencing the private education loan borrower's or cosigner's 48 liability for the private education loan; and 49 7. A clear and conspicuous statement disclosing that the borrower or 50 cosigner has a right to request all information possessed by the credi- 51 tor related to the private education loan debt, including, but not 52 limited to the information included in section eleven hundred six of 53 this article. 54 § 1106. Required information to be provided by creditors and debt 55 collectors. 1. A creditor or debt collector may not collect or attemptA. 3155 6 1 to collect a private education loan debt unless the creditor or debt 2 collector possesses the following: 3 (a) The name of the owner of the private education loan; 4 (b) The original creditor's name at the time of sale of the loan or 5 default, if applicable; 6 (c) The original creditor's account number used to identify the 7 private education loan at the time of sale or default, if the original 8 creditor used an account number to identify the private education loan 9 at the time of sale or default; 10 (d) The amount due at the time of sale, or at default, or, if the loan 11 is delinquent, to bring the loan current; 12 (e) A schedule of all transactions credited or debited to the private 13 education loan account; 14 (f) An itemization of interest and fees, if any, claimed to be owed 15 and whether those were imposed by the original creditor or any subse- 16 quent owners of the private education loan; 17 (g) The date that the private education loan was incurred; 18 (h) A billing statement or other account record indicating the date of 19 the first partial payment and/or the first day that a payment was 20 missed, whichever is earlier; 21 (i) A billing statement or other account record indicating the date of 22 the last payment made by the borrower or cosigner, if applicable; 23 (j) Any payments, settlement, or financial remuneration of any kind 24 paid to the creditor by a guarantor, cosigner, or surety, and the amount 25 of payment received; 26 (k) A copy of the self-certification form and any other "needs analy- 27 sis" conducted by the original creditor prior to origination of the 28 loan; 29 (l) A log of all collection attempts made in the previous twelve 30 months including date and time of all calls and written communications; 31 (m) Copies of all written settlement offers sent in the last twelve 32 months, or, in the alternative, a statement that the creditor has not 33 attempted to settle or otherwise renegotiate the debt prior to suit; 34 (n) Copies of all collection letters sent to the borrower and cosigner 35 since inception of the loan; 36 (o) Documentation establishing that the creditor is the owner of the 37 specific individual private education loan at issue. If the private 38 education loan was assigned more than once, the creditor must possess 39 each assignment or other writing evidencing the transfer of ownership of 40 the specific individual private education loan to establish an unbroken 41 chain of ownership, beginning with the original creditor to the first 42 subsequent creditor and each additional creditor. Each assignment or 43 other writing evidencing transfer of ownership or the right to collect 44 must contain the original creditor's account number (redacted for secu- 45 rity purposes to show only the last four digits) of the private educa- 46 tion loan purchased or otherwise assigned, the date of purchase and 47 assignment, and must clearly show the borrower's, and if applicable, 48 cosigner's correct name associated with the original account number. The 49 assignment or other writing attached shall be that by which the creditor 50 or other assignee acquired the private education loan, not a document 51 prepared for litigation or collection purposes; 52 (p) A copy of all pages of the contract, application or other docu- 53 ments evidencing the private education loan borrower's, and if applica- 54 ble, cosigner's liability for the private education loan, stating all 55 terms and conditions applicable to the private education loan; andA. 3155 7 1 (q) A signed affidavit or affidavits from each of the previous owners 2 of the private education loan regarding when the previous owner acceler- 3 ated the loan from delinquency status to default status, or if applica- 4 ble, a statement that no such acceleration occurred. 5 2. Upon written or oral request from a borrower or cosigner for any 6 information that a creditor or debt collector is required to possess 7 pursuant to subdivision one of this section, a creditor or debt collec- 8 tor shall send the requested information to the borrower or cosigner 9 within fifteen days of receipt of the request. 10 § 1107. Enforcement. 1. All private education lenders, creditors and 11 debt collectors shall comply with the provisions of this article. 12 2. Any borrower or cosigner who suffers damage as a result of the 13 failure of a private education lender, creditor, or debt collector 14 covered by the provision of this article may bring an action on their 15 own behalf and on behalf of a similarly situated class of consumers 16 against that person to recover or obtain any of the following: 17 (a) actual damages, but in no case shall the total award of damages be 18 less than five hundred dollars per person, per violation of this section 19 or of section three thousand twelve-c of the civil practice law and 20 rules; 21 (b) punitive damages; 22 (c) correction of any inaccurate, negative reporting by the lender, 23 creditor, or debt collector to any credit reporting agency; 24 (d) injunctive relief; and 25 (e) any other relief that the court deems proper. 26 3. If a creditor or debt collector fails to comply with subdivision 27 (e) of section three thousand twelve-c of the civil practice law and 28 rules, the borrower or the cosigner who sent the written notice therein 29 may bring an action on his or her own behalf or on behalf of a similarly 30 situated class of persons against the creditor or debt collector and may 31 recover or obtain any of the same forms of relief as provided in subdi- 32 vision two of this section, as well as an order setting aside or vacat- 33 ing any judgment entered against the borrower or cosigner. In addition 34 to any other remedies provided by this section or otherwise provided by 35 law, whenever it is proven by a preponderance of the evidence that a 36 creditor, debt collector, or attorney representing a creditor or debt 37 collector filed an affidavit required under section three thousand 38 twelve-c of the civil practice law and rules containing false informa- 39 tion, the court shall award treble actual damages to the borrower or 40 cosigner, but in no case shall the award of damages be less than one 41 thousand five hundred dollars, per person, per violation of that 42 section. 43 4. In the case of any successful action to enforce the foregoing 44 liability, a private education lender, creditor, or debt collector is 45 liable for the costs of the action, together with reasonable attorneys' 46 fees as determined by the court. 47 5. The attorney general or the district attorney of any county may 48 bring an action in the name of the people of the state to restrain or 49 prevent any violation of this article or any continuance of any such 50 violation. 51 6. Nothing in this article shall limit any statutory or common law 52 right of any person to bring any action in any court for any act, or the 53 right of the state to punish any person for any violation of any law. 54 § 1108. Rules and regulations. 1. In addition to such powers as may 55 otherwise be prescribed by this chapter, the superintendent of financial 56 services is hereby authorized and empowered to promulgate such rules andA. 3155 8 1 regulations as may in the judgment of the superintendent be consistent 2 with the purposes of this article, or appropriate for the effective 3 administration of this article, including, but not limited to: 4 (a) such rules and regulations in connection with the activities of 5 private education lenders, creditors, and debt collectors as may be 6 necessary and appropriate for the protection of borrowers in this state; 7 (b) such rules and regulations as may be necessary and appropriate to 8 define unfair, deceptive or abusive acts or practices in connection with 9 the activities of private education lenders, creditors, and debt collec- 10 tors; 11 (c) such rules and regulations as may define the terms used in this 12 article and as may be necessary and appropriate to interpret and imple- 13 ment the provisions of this article; and 14 (d) such rules and regulations as may be necessary for the enforcement 15 of this article. 16 2. The superintendent is hereby authorized and empowered to make such 17 specific rulings, demands and findings as the superintendent may deem 18 necessary for the proper conduct of the private education loan industry. 19 § 1109. Penalties. In addition to such penalties as may otherwise be 20 applicable by law, including but not limited to the penalties available 21 under section forty-four of the banking law, the superintendent of 22 financial services may, after notice and a hearing, or upon a finding of 23 a violation of this article in a civil action brought by the attorney 24 general, require any person found violating the provisions of this arti- 25 cle or the rules or regulations promulgated hereunder to pay to the 26 people of this state a penalty for each violation of the article or any 27 regulation or policy promulgated hereunder a sum not to exceed the 28 greater of (i) ten thousand dollars for each offense; (ii) a multiple of 29 two times the aggregate damages attributable to the violation; or (iii) 30 a multiple of two times the aggregate economic gain attributable to the 31 violation. 32 § 2. Subdivision (q-1) of section 105 of the civil practice law and 33 rules, as added by chapter 593 of the laws of 2021, is amended to read 34 as follows: 35 (q-1) Original creditor. The term "original creditor" means the entity 36 that owned a consumer credit account at the date of default giving rise 37 to a cause of action, except that if the consumer credit account is a 38 private education loan, as defined in subdivision one of section eleven 39 hundred of the general business law, "original creditor" means the 40 private education lender identified in a promissory note, loan agree- 41 ment, or loan contract entered into with a private education loan 42 borrower or cosigner. 43 § 3. The civil practice law and rules is amended by adding a new 44 section 3012-c to read as follows: 45 § 3012-c. Pleading requirements in private education loan actions. In 46 addition to any other papers and documents required by this chapter, in 47 an action arising out of a private education loan: 48 (a) Accompanying the complaint, one or more sworn affidavits by a 49 representative of the plaintiff or plaintiff's attorney shall be 50 attached to the complaint attesting: 51 (1) that the plaintiff has in its possession the information required 52 in subdivision one of section eleven hundred six of the general business 53 law; 54 (2) that the communication required in section eleven hundred five of 55 the general business law has been complied with;A. 3155 9 1 (3) as to whether the debt is eligible for an income-based repayment 2 plan free of charge to the borrower or cosigner, equivalent to the 3 repayment arrangement established for federal student loans under Arti- 4 cle IV of the Higher Education Act (20 USC 1078 et. seq.); 5 (4) whether, after reasonable inquiry, the plaintiff or the 6 plaintiff's attorney has reason to believe that the debt is a qualified 7 education loan as defined in 26 U.S.C. § 221; and 8 (5) that the information set forth in paragraph one of this subdivi- 9 sion, the allegations set forth in the complaint and any supporting 10 affidavits or affirmations, as well as the notarizations contained in 11 the supporting documents filed therewith, are accurate. 12 (b) Copies of the documentation identified in paragraphs (o) and (q) 13 of subdivision one of section eleven hundred six of the general business 14 law shall be attached to the complaint. The requirements of this subdi- 15 vision shall satisfy those required for an action arising out of a 16 consumer credit transaction, pursuant to subdivision (f) of section 3215 17 of this chapter, where the plaintiff is not the original creditor, as 18 defined in section 105 of this chapter. 19 (c) An affidavit by the plaintiff or plaintiff's attorney shall accom- 20 pany the complaint, stating that after reasonable inquiry, he or she has 21 reason to believe that the statute of limitations has not expired. 22 Compliance with this subdivision shall satisfy the provisions of 23 subdivision (j) of section 3215 of this chapter for an attorney repres- 24 enting a creditor seeking a judgment by default entered by the clerk in 25 an action arising from a private education loan debt. 26 (d) A judge or clerk shall not grant or enter a judgment pursuant to 27 rule 3212 or sections 3213, 3215 or 3218 of this chapter in an action 28 arising from a private education loan debt that does not comply with the 29 requirements described in subdivisions (a), (b), and (c) of this 30 section. 31 (e) Upon receipt of written notice provided by a borrower or cosigner, 32 or upon notice from the attorney general or superintendent of financial 33 services on behalf of a group of borrowers, to a creditor or debt 34 collector stating that the creditor or debt collector has failed to 35 comply with this section, the creditor or debt collector shall: 36 (i) Provide proof of compliance with the provisions of this section; 37 or 38 (ii) Take the following actions: 39 1. move to vacate the judgment; 40 2. refund all monies paid by the borrower or cosigner after the judg- 41 ment was entered; and 42 3. correct any inaccurate, negative credit information furnished by 43 the creditor or debt collector. 44 (f) The definitions of terms set forth in section eleven hundred of 45 the general business law shall apply to the provisions of this section. 46 § 4. Section 3213 of the civil practice law and rules, as amended by 47 chapter 593 of the laws of 2021, is amended to read as follows: 48 § 3213. Motion for summary judgment in lieu of complaint. When an 49 action is based upon an instrument for the payment of money only or upon 50 any judgment, the plaintiff may serve with the summons a notice of 51 motion for summary judgment and the supporting papers in lieu of a 52 complaint. The summons served with such motion papers shall require the 53 defendant to submit answering papers on the motion within the time 54 provided in the notice of motion. The minimum time such motion shall be 55 noticed to be heard shall be as provided by subdivision (a) of rule 320 56 for making an appearance, depending upon the method of service. If theA. 3155 10 1 plaintiff sets the hearing date of the motion later than the minimum 2 time therefor, he may require the defendant to serve a copy of his 3 answering papers upon him within such extended period of time, not 4 exceeding ten days, prior to such hearing date. No default judgment may 5 be entered pursuant to subdivision (a) of section 3215 prior to the 6 hearing date of the motion. If the motion is denied, the moving and 7 answering papers shall be deemed the complaint and answer, respectively, 8 unless the court orders otherwise. The additional notice required by 9 subdivision (j) of rule 3212 shall be applicable to a motion made pursu- 10 ant to this section in any action to collect a debt arising out of a 11 consumer credit transaction where a consumer is a defendant. The addi- 12 tional pleading required by section 3012-c shall be applicable to a 13 motion made pursuant to this section in any action to collect a debt 14 arising out of a private education loan, as defined in section eleven 15 hundred of the general business law. 16 § 5. Severability. If any clause, sentence, paragraph, subdivision, 17 section or part of this act shall be adjudged by any court of competent 18 jurisdiction to be invalid, such judgment shall not affect, impair, or 19 invalidate the remainder thereof, but shall be confined in its operation 20 to the clause, sentence, paragraph, subdivision, section or part thereof 21 directly involved in the controversy in which such judgment shall have 22 been rendered. It is hereby declared to be the intent of the legislature 23 that this act would have been enacted even if such invalid provisions 24 had not been included herein. 25 § 6. This act shall take effect on the sixtieth day after it shall 26 have become a law.
