​AFSA’s State Government Affairs team recently submitted a lengthy letter to the New York Department of Consumer and Worker Protection (DCWP) expressing significant concerns regarding proposed amendments to debt collection rules. While AFSA supports fair debt collection practices, the current proposals could unintentionally harm New York consumers and financial institutions.

Key Concerns and Recommendations:

• Original Creditors: AFSA argues that applying the same rules to both original creditors and other debt collectors will disrupt communication and could lead to earlier, more aggressive collection actions, and recommends exempting licensed financial institutions already under strict oversight, and clarifying the definition of “original creditor.”

• “Debt Collection Procedures” Definition: AFSA is concerned that the proposed definition is too broad and could encompass routine account management and suggests narrowing the definition to apply only after a debt has been sold, assigned, accelerated, or charged off.

• Validation Notice Requirements: AFSA believes these notices are inappropriate and burdensome for original creditors, who already communicate with consumers and recommends requiring validation notices only upon debt acceleration. Also recommended: expanding exemptions, excluding original creditors, removing requirements for natural person contact information, and reconsidering rules for non-English notices due to operational challenges and potential consumer confusion.

• Credit Reporting (14-Day Delay): AFSA argues that a proposed 14-day delay before reporting debt information to credit agencies is redundant with federal law and creates operational issues, and recommends clarifying the trigger point, exempting continuous furnishers, allowing single-channel notice, and exempting institutions already complying with federal negative reporting notice requirements.

• Electronic Communications: AFSA is concerned about repeated consent disclosures for electronic communications and suggests avoiding redundant disclosures, clarifying that opt-out mechanisms apply only to specific mediums, and amending consent requirements for acquired accounts.

• Notice of Unverified Debt: AFSA recommends removing or revising the requirement for original creditors to issue a “Notice of Unverified Debt,” deeming it unnecessary.

This and other SGA letters can be found on the direct advocacy section of AFSA’s website.