CRC to NY DFS: Proposed Rules Harm Consumers; Conflict with Existing Law

The New York Department of Financial Services (NY DFS) has continued its years-long process to update its debt collection regulations. According to the Consumer Relations Consortium (CRC), however, the current version of the proposal conflicts with existing law, oversimplifies the statute of limitations, and harms consumers by depriving them of their preferred communication channel and prohibiting the use of the charge-off date on certain types of accounts. 

The NY DFS originally proposed amendments to the debt collection regulations in late 2021. In February 2022, the CRC submitted a comment addressing the issues with the proposal, and in late December 2022, the NY DFS released an updated proposal. 

To highlight the unintended consequences of the updated proposal, on February 13, 2023, the CRC submitted a comment prepared by Legal Advisory Board members John Rossman of Moss and Barnett and Abigail Pressler of Ballard Spahr. CRC member, Kelly Knepper-Stephens of TrueAccord also contributed.