Bill Text: NY S04827 | 2019-2020 | General Assembly | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
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 11-0)
Status: (Introduced - Dead) 2020-07-22 - PRINT NUMBER 4827E [S04827 Detail]
Download: New_York-2019-S04827-Amended.html
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 11-0)
Status: (Introduced - Dead) 2020-07-22 - PRINT NUMBER 4827E [S04827 Detail]
Download: New_York-2019-S04827-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 4827--C 2019-2020 Regular Sessions IN SENATE 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: 1 Section 1. Short title. This act shall be known and may be cited as 2 the "consumer credit fairness act". 3 § 2. Section 105 of the civil practice law and rules is amended by 4 adding two new subdivisions (h-1) and (q-1) to read as follows: 5 (h-1) Finance charge. The term "finance charge" means the cost of 6 consumer credit as a dollar amount, includes any charge payable directly 7 or indirectly by the consumer and imposed directly or indirectly by the 8 creditor as an incident to or a condition of the extension of credit, 9 and does not include any charge of a type payable in a comparable cash 10 transaction. 11 (q-1) Original creditor. The term "original creditor" means the entity 12 that owned a consumer credit account at the date of default giving rise 13 to a cause of action. 14 § 3. Subdivision 2 of section 213 of the civil practice law and rules, 15 as amended by chapter 709 of the laws of 1988, is amended to read as 16 follows: 17 2. an action upon a contractual obligation or liability, express or 18 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. LBD00927-12-0S. 4827--C 2 1 hundred fourteen-i of this article or article 2 of the uniform commer- 2 cial code or article 36-B of the general business law; 3 § 4. The civil practice law and rules is amended by adding a new 4 section 214-i to read as follows: 5 § 214-i. Certain actions arising out of consumer credit transactions 6 to be commenced within three years. An action arising out of a consumer 7 credit transaction where a purchaser, borrower or debtor is a defendant 8 must be commenced within three years, except as provided in section two 9 hundred thirteen-a of this article or article 2 of the uniform commer- 10 cial code or article 36-B of the general business law. Notwithstanding 11 any other provision of law, when the applicable limitations period 12 expires, any subsequent payment toward, written or oral affirmation of 13 or other activity on the debt does not revive or extend the limitations 14 period. 15 § 5. The civil practice law and rules is amended by adding a new 16 section 306-d to read as follows: 17 § 306-d. Additional mailing of notice in an action arising out of a 18 consumer credit transaction. (a) At the time of filing with the clerk of 19 the proof of service of the summons and complaint in an action arising 20 out of a consumer credit transaction, the plaintiff shall submit to the 21 clerk a stamped, unsealed envelope addressed to the defendant together 22 with a written notice in clear type of no less than twelve-point in 23 size, in both English and Spanish, and containing the following 24 language: 25 ADDITIONAL NOTICE OF LAWSUIT 26 (NAME OF COURT) 27 (COUNTY) 28 (STREET ADDRESS, ROOM NUMBER) 29 (CITY, STATE, ZIP CODE) 30 (NAME OF DEFENDANT) 31 (ADDRESS OF DEFENDANT) 32 Plaintiff: 33 Defendant: 34 Name of original creditor, unless same: 35 Index number: 36 Attention: a lawsuit has been filed against you claiming that you owe 37 money for an unpaid consumer debt. 38 You may wish to contact an attorney. 39 You should respond to the lawsuit as soon as possible by filing an 40 "answer" which may be done at the court clerk's office listed above. 41 If you do not respond to the lawsuit, the court may enter a money 42 judgment against you. Once entered, a judgment is good and can be used 43 against you for twenty years, and your personal property and money, 44 including a portion of your paycheck and/or bank account, may be taken 45 from you. Also, a judgment may affect your credit score and can affect 46 your ability to rent a home, find a job, or take out a loan. 47 You CANNOT be arrested or sent to jail for owing a debt. 48 Additional information can be found at the New York state court system 49 website. 50 Sources of information and assistance: 51 The court encourages you to inform yourself about your options as a 52 defendant in this lawsuit. In addition to seeking assistance from aS. 4827--C 3 1 private attorney or legal aid office, there are free legal assistance 2 computer programs that you can use online to help you represent yourself 3 in this lawsuit. 4 For further information, or to locate a legal aid program near you, you 5 may visit the LawHelpNY website or the New York state court system 6 website, which has information for representing yourself and links to 7 other resources at [insert URL for consumer credit resources for unrep-8resented litigants published by the New York state office of court9administration]. 10 (b) The face of the envelope shall be addressed to the defendant at 11 the address at which process was served, and shall contain the defend- 12 ant's name, address (including apartment number) and zip code. The face 13 of the envelope also shall state the appropriate clerk's office as its 14 return address. 15 (c) The clerk promptly shall mail to the defendant the envelope 16 containing the additional notice set forth in subdivision (a) of this 17 section. No default judgment based on the defendant's failure to answer 18 shall be entered unless there has been compliance with this section, and 19 at least twenty days have elapsed from the date of mailing by the clerk. 20 No default judgment based on the defendant's failure to answer shall be 21 entered if the additional notice is returned to the court as undelivera- 22 ble. Receipt of the additional notice by the defendant does not confer 23 jurisdiction on the court in the absence of proper service of process. 24 (d) The chief administrative judge shall issue a Spanish translation 25 of the notice in subdivision (a) of this section and shall maintain and 26 publish the URL address for the web page containing consumer resources 27 for unrepresented litigants. 28 § 6. Subdivision (a) of section 3012 of the civil practice law and 29 rules is amended to read as follows: 30 (a) Service of pleadings. The complaint may be served with the 31 summons, except that in an action arising out of a consumer credit tran- 32 saction, the complaint shall be served with the summons. A subsequent 33 pleading asserting new or additional claims for relief shall be served 34 upon a party who has not appeared in the manner provided for service of 35 a summons. In any other case, a pleading shall be served in the manner 36 provided for service of papers generally. Service of an answer or reply 37 shall be made within twenty days after service of the pleading to which 38 it responds. 39 § 7. Rule 3016 of the civil practice law and rules is amended by 40 adding a new subdivision (j) to read as follows: 41 (j) Consumer credit transactions. In an action arising out of a 42 consumer credit transaction where a purchaser, borrower or debtor is a 43 defendant, the contract or other written instrument on which the action 44 is based shall be attached to the complaint and the following informa- 45 tion shall be set forth in the complaint: 46 (1) The name of the original creditor; 47 (2) The last four digits of the account number printed on the most 48 recent monthly statement recording a purchase transaction, last payment 49 or balance transfer; 50 (3) The date and amount of the last payment or, if no payment was 51 made, a statement that the purchaser, borrower or debtor made no payment 52 on the account; 53 (4) If the complaint contains a cause of action based on an account 54 stated, the date that the final statement of account was mailed to the 55 defendant;S. 4827--C 4 1 (5) (A) Except as provided in subparagraph (B) of this paragraph, an 2 itemization of the amount sought, by (i) principal; (ii) finance charge 3 or charges; (iii) fees imposed by the original creditor; (iv) collection 4 costs; (v) attorney's fees; (vi) interest; and (vii) any other fees and 5 charges. 6 (B) If the account was a revolving credit account, an itemized 7 accounting of the debt, including: (i) the total amount of the debt due 8 as of charge-off; (ii) the total amount of interest accrued since 9 charge-off; (iii) the total amount of non-interest charges or fees 10 accrued since charge-off; and (iv) the total amount of payments and/or 11 credits made on the debt since charge-off; 12 (6) The account balance printed on the most recent monthly statement 13 recording a purchase transaction, last payment or balance transfer; 14 (7) (A) Whether the plaintiff is the original creditor. 15 (B) If the plaintiff is not the original creditor, the complaint shall 16 also state (i) the date on which the debt was sold or assigned to the 17 plaintiff; (ii) the name of each previous owner of the account from the 18 original creditor to the plaintiff and the date on which the debt was 19 assigned to that owner by the original creditor or subsequent owner; and 20 (iii) the amount due at the time of the sale or assignment of the debt 21 by the original creditor; and 22 (8) Any matters required to be stated with particularity pursuant to 23 rule 3015 of this article. 24 § 8. Subdivision (e) of rule 3211 of the civil practice law and rules, 25 as amended by chapter 616 of the laws of 2005, is amended to read as 26 follows: 27 (e) Number, time and waiver of objections; motion to plead over. At 28 any time before service of the responsive pleading is required, a party 29 may move on one or more of the grounds set forth in subdivision (a) of 30 this rule, and no more than one such motion shall be permitted. Any 31 objection or defense based upon a ground set forth in paragraphs one, 32 three, four, five and six of subdivision (a) of this rule is waived 33 unless raised either by such motion or in the responsive pleading. A 34 motion based upon a ground specified in paragraph two, seven or ten of 35 subdivision (a) of this rule may be made at any subsequent time or in a 36 later pleading, if one is permitted; an objection that the summons and 37 complaint, summons with notice, or notice of petition and petition was 38 not properly served is waived if, having raised such an objection in a 39 pleading, the objecting party does not move for judgment on that ground 40 within sixty days after serving the pleading, unless the court extends 41 the time upon the ground of undue hardship. The foregoing sentence shall 42 not apply in any proceeding to collect a debt arising out of a consumer 43 credit transaction where a consumer is a defendant or under subdivision 44 one or two of section seven hundred eleven of the real property actions 45 and proceedings law. The papers in opposition to a motion based on 46 improper service shall contain a copy of the proof of service, whether 47 or not previously filed. An objection based upon a ground specified in 48 paragraph eight or nine of subdivision (a) of this rule is waived if a 49 party moves on any of the grounds set forth in subdivision (a) of this 50 rule without raising such objection or if, having made no objection 51 under subdivision (a) of this rule, he or she does not raise such 52 objection in the responsive pleading which, in any action to collect a 53 debt arising out of a consumer credit transaction where a consumer is a 54 defendant, includes any amended responsive pleading. 55 § 9. Rule 3212 of the civil practice law and rules is amended by 56 adding a new subdivision (j) to read as follows:S. 4827--C 5 1 (j) Additional notice in any action to collect a debt arising out of 2 a consumer credit transaction where a consumer is a defendant. 3 1. At the time of service of a notice of motion any part of which 4 requests summary judgment in whole or in part, where the moving party 5 is a plaintiff and the respondent is a consumer defendant in an action 6 to collect a debt arising out of a consumer credit transaction, and 7 where the consumer defendant against whom summary judgment is sought is 8 not represented by an attorney, the plaintiff shall submit to the clerk 9 a stamped, unsealed envelope addressed to the defendant together with 10 the following additional notice in English and Spanish to be printed in 11 clear type no less than twelve-point in size: 12 IMPORTANT NOTICE 13 The Plaintiff has asked the Court to enter judgment against you by 14 making a Motion for Summary Judgment. Keep this Notice and the envelope 15 it came in. The Motion for Summary Judgment was separately served on 16 you. To avoid entry of judgment: 17 (1) You must appear in court as directed below: 18 WHERE: Name of Court, Street Address, Room Number 19 WHEN: Date and time 20 (2) You should oppose the motion IN WRITING. 21 HOW TO OPPOSE THE MOTION: 22 (1) State the legal reasons why the court should not enter judgment 23 against you, including your defenses. 24 (2) State the facts that support your defenses. 25 (3) Attach affidavits and/or exhibits to support the facts you assert. 26 (a) Affidavits are sworn statements of witnesses (including you) who 27 state facts they know to be true. The affidavit should state the facts 28 and how the witness knows them. Also, the affidavit should explain any 29 exhibits. An affidavit of service is an affidavit that states how and 30 when papers were served. An affidavit must be signed in front of a 31 notary. Free forms are available on the New York State Court system 32 website at [insert URL for consumer credit resources for unrepresented33litigants published by the New York State Office of Court Adminis-34tration]. 35 (b) Exhibits are copies of documents. Exhibits are usually attached to 36 affidavits. 37 (4) Have someone (not you or another defendant in the lawsuit) mail a 38 copy of your opposition to the plaintiff's attorney before your court 39 date and have them prepare an affidavit of service by mail. 40 (5) Bring a copy of your opposition and the affidavit of service to 41 your court date. 42 (6) Attend your court date. 43 IF YOU NEED MORE TIME: 44 If you need more time to prepare your written response, you should 45 appear at your court date and ask the judge for more time. You can also 46 ask the judge to refer you for legal help. 47 IF YOU NEED LEGAL HELP: 48 You may seek legal help from a private attorney or a legal aid office. 49 Some courts have free legal assistance programs for people without 50 lawyers. You can find resources on the New York State court system 51 website at [insert URL for consumer credit resources for unrepresented52litigants published by the New York State Office of Court Adminis-53tration]. 54 2. The clerk promptly shall mail to the defendant the envelope 55 containing the additional notice set forth in paragraph one of this 56 subdivision and note the date of mailing in the case record. SummaryS. 4827--C 6 1 judgment shall not be entered based on defendant's failure to oppose the 2 motion unless there has been compliance with this section and at least 3 fourteen days have elapsed from the date of mailing by the clerk or 4 nineteen days if the plaintiff's notice of motion demands additional 5 time under subdivision (b) of rule 2214 of this chapter. 6 3. The chief administrative judge shall issue a Spanish translation of 7 the notice in paragraph one of this subdivision and shall maintain and 8 publish the URL address for the web page containing consumer credit 9 resources for unrepresented litigants. 10 § 10. Section 3213 of the civil practice law and rules, as amended by 11 chapter 210 of the laws of 1969, is amended to read as follows: 12 § 3213. Motion for summary judgment in lieu of complaint. When an 13 action is based upon an instrument for the payment of money only or upon 14 any judgment, the plaintiff may serve with the summons a notice of 15 motion for summary judgment and the supporting papers in lieu of a 16 complaint. The summons served with such motion papers shall require the 17 defendant to submit answering papers on the motion within the time 18 provided in the notice of motion. The minimum time such motion shall be 19 noticed to be heard shall be as provided by subdivision (a) of rule 320 20 for making an appearance, depending upon the method of service. If the 21 plaintiff sets the hearing date of the motion later than the minimum 22 time therefor, he may require the defendant to serve a copy of his 23 answering papers upon him within such extended period of time, not 24 exceeding ten days, prior to such hearing date. No default judgment may 25 be entered pursuant to subdivision (a) of section 3215 prior to the 26 hearing date of the motion. If the motion is denied, the moving and 27 answering papers shall be deemed the complaint and answer, respectively, 28 unless the court orders otherwise. The additional notice required by 29 subdivision (j) of rule 3212 shall be applicable to a motion made pursu- 30 ant to this section in any action to collect a debt arising out of a 31 consumer credit transaction where a consumer is a defendant. 32 § 11. Subdivision (f) of section 3215 of the civil practice law and 33 rules, as amended by chapter 453 of the laws of 2006, is amended and a 34 new subdivision (j) is added to read as follows: 35 (f) Proof. On any application for judgment by default, the applicant 36 shall file proof of service of the summons and the complaint, or a 37 summons and notice served pursuant to subdivision (b) of rule 305 or 38 subdivision (a) of rule 316 of this chapter, and proof of the facts 39 constituting the claim, the default and the amount due by affidavit made 40 by the party, or where the state of New York is the plaintiff, by affi- 41 davit made by an attorney from the office of the attorney general who 42 has or obtains knowledge of such facts through review of state records 43 or otherwise. Where a verified complaint has been served, it may be used 44 as the affidavit of the facts constituting the claim and the amount due; 45 in such case, an affidavit as to the default shall be made by the party 46 or the party's attorney. In an action arising out of a consumer credit 47 transaction, if the plaintiff is not the original creditor, the appli- 48 cant shall include: (1) an affidavit by the original creditor of the 49 facts constituting the debt, the default in payment, the sale or assign- 50 ment of the debt, and the amount due at the time of sale or assignment; 51 (2) for each subsequent assignment or sale of the debt to another enti- 52 ty, an affidavit of sale of the debt by the debt seller, completed by 53 the seller or assignor; and (3) an affidavit of a witness of the plain- 54 tiff, which includes a chain of title of the debt, completed by the 55 plaintiff or plaintiff's witness. The chief administrative judge shall 56 issue form affidavits to satisfy the requirements of this subdivisionS. 4827--C 7 1 for consumer credit transactions. When jurisdiction is based on an 2 attachment of property, the affidavit must state that an order of 3 attachment granted in the action has been levied on the property of the 4 defendant, describe the property and state its value. Proof of mailing 5 the notice required by subdivision (g) of this section, where applica- 6 ble, shall also be filed. 7 (j) Affidavit. A request for a default judgment entered by the clerk, 8 must be accompanied by an affidavit by the plaintiff or plaintiff's 9 attorney stating that after reasonable inquiry, he or she has reason to 10 believe that the statute of limitations has not expired. The chief 11 administrative judge shall issue form affidavits to satisfy the require- 12 ments of this subdivision for consumer credit transactions. 13 § 12. The civil practice law and rules is amended by adding a new 14 section 7516 to read as follows: 15 § 7516. Confirmation of an award based on a consumer credit trans- 16 action. In any proceeding under section 7510 of this article to confirm 17 an award based on a consumer credit transaction, the party seeking to 18 confirm the award shall plead the actual terms and conditions of the 19 agreement to arbitrate. The party shall attach to its petition (a) the 20 agreement to arbitrate; (b) the demand for arbitration or notice of 21 intention to arbitrate, with proof of service; and (c) the arbitration 22 award, with proof of service. If the award does not contain a statement 23 of the claims submitted for arbitration, of the claims ruled upon by the 24 arbitrator, and of the calculation of figures used by the arbitrator in 25 arriving at the award, then the petition shall contain such a statement. 26 The court shall not grant confirmation of an award based on a consumer 27 credit transaction unless the party seeking to confirm the award has 28 complied with this section. 29 § 13. Subdivision 2 of section 212 of the judiciary law is amended by 30 adding a new paragraph (aa) to read as follows: 31 (aa) Not later than January first, two thousand twenty-one, make 32 available Spanish translations of the additional notices in consumer 33 credit transaction actions and proceedings required by section 306-d and 34 subdivision (j) of rule 3212 of the civil practice law and rules, and 35 make available form affidavits required for a motion for default judg- 36 ment in a consumer credit transaction action or proceeding required by 37 subdivision (f) of section 3215 of the civil practice law and rules. 38 § 14. This act shall take effect immediately; provided, however, that 39 sections two, three, five, six, seven, eight, nine, ten, eleven and 40 twelve shall take effect on the one hundred eightieth day after it shall 41 have become a law and shall apply to actions and proceedings commenced 42 on or after such date; and provided, further, that section four of this 43 act shall take effect on the one hundred fiftieth day after this act 44 shall have become a law.
