AFSA's State Government Affairs team has submitted a letter to the New York Department of Consumer and Worker Protection (DCWP) regarding proposed amendments to debt collection rules. The American Financial Services Association (AFSA) supports fair debt collection practices but believes that the current proposals may negatively impact New York consumers and financial institutions.
The letter outlines several key concerns and recommendations:
- **Original Creditors**: AFSA argues that applying the same rules to both original creditors and other debt collectors could disrupt communication, leading to earlier and more aggressive collection actions. They recommend exempting licensed financial institutions already under strict oversight and clarifying the definition of "original creditor."
- **"Debt Collection Procedures" Definition**: AFSA expresses concern that the proposed definition is too broad, potentially including routine account management. They suggest narrowing it to apply only after a debt has been sold, assigned, accelerated, or charged off.
- **Validation Notice Requirements**: AFSA finds these notices inappropriate for original creditors who already communicate with consumers. They recommend requiring validation notices only upon debt acceleration and suggest expanding exemptions, excluding original creditors, removing requirements for natural person contact information, and reconsidering rules for non-English notices due to operational challenges.
- **Credit Reporting (14-Day Delay)**: AFSA argues that a proposed 14-day delay before reporting debt information is redundant with federal law and creates operational issues. They recommend clarifying the trigger point, exempting continuous furnishers, allowing single-channel notice, and exempting institutions complying with federal negative reporting notice requirements.
- **Electronic Communications**: Concerns about repeated consent disclosures for electronic communications are noted by AFSA. They suggest avoiding redundant disclosures, clarifying opt-out mechanisms for specific mediums, and amending consent requirements for acquired accounts.
- **Notice of Unverified Debt**: AFSA recommends removing or revising this requirement for original creditors as they deem it unnecessary.
These concerns are detailed in a letter available on the direct advocacy section of AFSA’s website.