NY DFS Issues Proposed Amendments to Debt Collection Regulation

The New York Department of Financial Services yesterday released its proposed amendment to the state’s debt collection regulation, which adopts some of what is included in Regulation F, while also introducing some new wrinkles that seek to protect consumers by putting them on “a path to financial well-being,” according to the DFS’s Acting Superintendent.

A copy of the proposed amendment can be accessed by clicking here.

EDITOR’S NOTE: Join Don Maurice from Maurice Wutscher and David Reid from RMA International on Friday, December 17 at 1pm ET for a webinar where they will discuss the proposed amendment and answer your questions. Click here to sign up.

Like in Regulation F, the DFS’s proposed amendment will require collectors to include validation information either in the initial communication or within five days after the initial communication with a consumer. There is no mention, however, of the Model Validation Notice.

The proposed amendment also includes caps on the number of telephone call attempts and conversations that can be had, although it is more restrictive than what the Consumer Financial Protection Bureau laid out in Regulation F. Under the proposed amendment, collectors would be allowed one telephone call and three attempted calls per seven-day period per alleged debt, unless the consumer consents to being contacted.

Debt collectors are allowed to communicate with consumers via text messaging, email, and social media, but only if the consumer has given revocable consent to be contacted, either in writing or with an electronic signature, and as long as each communication includes a disclosure that consent can be revoked at any time.

“Predatory debt collection practices can deceive consumers and ultimately lead them further into economic hardship,” said Adrienne Harris, the DFS’s Acting Superintendent, in a statement. “DFS’ proposed amendment requires clear communication on consumer debt obligations and ensures the consumer has the right information to dispute the validity of the debt. This amendment enhances consumer protections through increased transparency and prevention of harassment, helping put people on a path to financial well-being.”

Comments on the proposed amendment will be accepted for 60 days — through February 14, 2022.

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