S T A T E   O F   N E W   Y O R K
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    S. 2454                                                  A. 2678

                       2013-2014 Regular Sessions

                      S E N A T E - A S S E M B L Y

                            January 17, 2013
                               ___________

IN  SENATE -- Introduced by Sen. SAVINO -- read twice and ordered print-
  ed, and when printed to be committed to the Committee on Judiciary

IN ASSEMBLY -- Introduced by M. of A. WEINSTEIN, JAFFEE, BOYLAND,  MILL-
  MAN,  GIBSON, TITONE, CASTRO, COLTON, WEPRIN, GALEF -- Multi-Sponsored
  by -- M. of A. CRESPO, CYMBROWITZ, GLICK,  GOTTFRIED,  JACOBS,  PERRY,
  SCHIMEL -- read once and referred to the Committee on Judiciary

AN ACT to amend the civil practice law and rules, in relation to consum-
  er credit transactions

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Short title. This act shall be known and may  be  cited  as
the "consumer credit fairness act".
  S 2. Subdivision 2 of section 213 of the civil practice law and rules,
as  amended  by  chapter  709 of the laws of 1988, is amended to read as
follows:
  2. an action upon a contractual obligation or  liability,  express  or
implied,  except  as  provided  in section two hundred thirteen-a OR TWO
HUNDRED FOURTEEN-F of this article or article 2 of the  uniform  commer-
cial code or article 36-B of the general business law;
  S  3.  The  civil  practice  law  and rules is amended by adding a new
section 214-f to read as follows:
  S 214-F. CERTAIN ACTIONS ARISING OUT OF CONSUMER  CREDIT  TRANSACTIONS
TO  BE COMMENCED WITHIN THREE YEARS. AN ACTION ARISING OUT OF A CONSUMER
CREDIT TRANSACTION WHERE A PURCHASER, BORROWER OR DEBTOR IS A  DEFENDANT
MUST  BE COMMENCED WITHIN THREE YEARS, EXCEPT AS PROVIDED IN SECTION TWO
HUNDRED THIRTEEN-A OF THIS ARTICLE OR ARTICLE 2 OF THE  UNIFORM  COMMER-
CIAL  CODE  OR ARTICLE 36-B OF THE GENERAL BUSINESS LAW. WHEN THE PERIOD
WITHIN WHICH AN ACTION MAY BE COMMENCED UNDER THIS SECTION HAS  EXPIRED,
THE RIGHT TO COLLECT CONSUMER CREDIT DEBT IS EXTINGUISHED AS WELL AS THE
REMEDY.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05625-02-3
              

S. 2454                             2                            A. 2678

  FOR  PURPOSES  OF  THIS SECTION, "THE RIGHT TO COLLECT CONSUMER CREDIT
DEBT" SHALL MEAN ANY ATTEMPTS BY THE CREDITOR, THIRD PARTY PURCHASER, OR
OTHER AUTHORIZED THIRD PARTY TO COLLECT SUCH  DEBT  INCLUDING,  BUT  NOT
LIMITED TO, CALLS, MAIL OR OTHER ATTEMPTS TO COLLECT.
  S  4.  The  civil  practice  law  and rules is amended by adding a new
section 306-d to read as follows:
  S 306-D. ADDITIONAL MAILING OF NOTICE IN AN ACTION ARISING  OUT  OF  A
CONSUMER  CREDIT TRANSACTION. 1. AT THE TIME OF FILING WITH THE CLERK OF
THE PROOF OF SERVICE OF THE SUMMONS AND COMPLAINT IN AN  ACTION  ARISING
OUT  OF A CONSUMER CREDIT TRANSACTION, THE PLAINTIFF SHALL SUBMIT TO THE
CLERK A STAMPED ENVELOPE ADDRESSED TO  THE  DEFENDANT  TOGETHER  WITH  A
WRITTEN  NOTICE  IN  CLEAR TYPE OF NO LESS THAN TWELVE-POINT IN SIZE, IN
BOTH ENGLISH AND SPANISH, AND CONTAINING THE FOLLOWING LANGUAGE:
                            NOTICE OF LAWSUIT
(DATE)

(NAME OF COURT)
(COUNTY)
(STREET ADDRESS, ROOM NUMBER)
(CITY, STATE, ZIP CODE)

(NAME OF DEFENDANT)
(ADDRESS OF DEFENDANT)

PLAINTIFF:__________________________________
DEFENDANT:__________________________________
NAME OF ORIGINAL CREDITOR, UNLESS SAME:______________________________
INDEX NUMBER:_______________________________

ATTENTION: A LAWSUIT HAS BEEN FILED AGAINST YOU CLAIMING  THAT  YOU  OWE
MONEY FOR AN UNPAID CREDIT CARD, MEDICAL, STUDENT LOAN OR OTHER DEBT.
YOU  SHOULD  GO TO THE COURT CLERK'S OFFICE AT THE ABOVE ADDRESS AS SOON
AS POSSIBLE TO RESPOND TO THE LAWSUIT. YOU MAY WISH TO CONTACT AN ATTOR-
NEY. IF YOU DO NOT HAVE AN ATTORNEY, HELP IS AVAILABLE AT THE COURT.
IF YOU DO NOT RESPOND TO THE LAWSUIT, THE COURT  MAY  ENTER  A  JUDGMENT
AGAINST  YOU.  ONCE  ENTERED, A JUDGMENT IS GOOD AND CAN BE USED AGAINST
YOU FOR TWENTY YEARS, AND  YOUR  MONEY,  INCLUDING  A  PORTION  OF  YOUR
PAYCHECK  AND/OR  BANK ACCOUNT, MAY BE TAKEN. ALSO, A JUDGMENT WILL HURT
YOUR CREDIT SCORE AND CAN AFFECT YOUR ABILITY TO RENT  A  HOME,  FIND  A
JOB, OR TAKE OUT A LOAN.
YOU CANNOT BE ARRESTED OR SENT TO JAIL FOR OWING A DEBT.
IT IS IMPORTANT THAT YOU GO TO THE COURT CLERK'S OFFICE LISTED ABOVE AND
BRING  THIS NOTICE WITH YOU.  ADDITIONAL INFORMATION CAN BE FOUND AT THE
COURT SYSTEM WEBSITE AT:  WWW.COURTS.STATE.NY.US
  2. THE FACE OF THE ENVELOPE SHALL BE ADDRESSED TO THE DEFENDANT AT THE
ADDRESS AT WHICH PROCESS WAS SERVED, AND SHALL CONTAIN  THE  DEFENDANT'S
NAME, ADDRESS (INCLUDING APARTMENT NUMBER) AND ZIP CODE. THE FACE OF THE
ENVELOPE  ALSO  SHALL STATE THE APPROPRIATE CLERK'S OFFICE AS ITS RETURN
ADDRESS.
  3. THE CLERK  PROMPTLY  SHALL  MAIL  TO  THE  DEFENDANT  THE  ENVELOPE
CONTAINING  THE  ADDITIONAL  NOTICE SET FORTH IN SUBDIVISION ONE OF THIS
SECTION. NO DEFAULT JUDGMENT BASED ON THE DEFENDANT'S FAILURE TO  ANSWER
SHALL BE ENTERED UNLESS THERE HAS BEEN COMPLIANCE WITH THIS SECTION, AND
AT LEAST TWENTY DAYS HAVE ELAPSED FROM THE DATE OF MAILING BY THE CLERK.
  S  5.  Subdivision  (a)  of section 3012 of the civil practice law and
rules is amended to read as follows:

S. 2454                             3                            A. 2678

  (a) Service of  pleadings.  The  complaint  may  be  served  with  the
summons, EXCEPT THAT IN AN ACTION ARISING OUT OF A CONSUMER CREDIT TRAN-
SACTION,  THE  COMPLAINT  SHALL BE SERVED WITH THE SUMMONS. A subsequent
pleading asserting new or additional claims for relief shall  be  served
upon  a party who has not appeared in the manner provided for service of
a summons. In any other case, a pleading shall be served in  the  manner
provided  for service of papers generally. Service of an answer or reply
shall be made within twenty days after service of the pleading to  which
it responds.
  S  6.    Rule  3016  of the civil practice law and rules is amended by
adding a new subdivision (i) to read as follows:
  (I) CONSUMER CREDIT TRANSACTIONS.  IN  AN  ACTION  ARISING  OUT  OF  A
CONSUMER  CREDIT  TRANSACTION WHERE A PURCHASER, BORROWER OR DEBTOR IS A
DEFENDANT, THE CONTRACT OR OTHER WRITTEN INSTRUMENT ON WHICH THE  ACTION
IS  BASED  SHALL BE ATTACHED TO THE COMPLAINT AND THE FOLLOWING INFORMA-
TION SHALL BE SET FORTH IN THE COMPLAINT:
  1. THE NAME OF THE ORIGINAL CREDITOR;
  2. THE LAST FOUR DIGITS OF THE ORIGINAL ACCOUNT NUMBER;
  3. THE DATE AND AMOUNT OF THE LAST PAYMENT;
  4. IF THE COMPLAINT CONTAINS A CAUSE OF ACTION  BASED  ON  AN  ACCOUNT
STATED,  THE  DATE THAT THE FINAL STATEMENT OF ACCOUNT WAS MAILED TO THE
DEFENDANT;
  5. AN ITEMIZATION OF THE AMOUNT SOUGHT, BY (I) PRINCIPAL; (II) FINANCE
CHARGE OR CHARGES; (III) FEES IMPOSED BY  THE  ORIGINAL  CREDITOR;  (IV)
COLLECTION  COSTS;  (V)  ATTORNEY'S  FEES;  (VI) INTEREST; AND (VII) ANY
OTHER FEES AND CHARGES. THE TERM "FINANCE CHARGE" MEANS A FINANCE CHARGE
AS DEFINED IN REGULATION Z, 12 C.F.R. S 226.4.
  6. WHETHER THE PLAINTIFF IS THE ORIGINAL CREDITOR. IF THE PLAINTIFF IS
NOT THE ORIGINAL CREDITOR, THE COMPLAINT SHALL STATE  (I)  THE  DATE  ON
WHICH  THE DEBT WAS ASSIGNED TO THE PLAINTIFF; AND (II) THE NAME OF EACH
PREVIOUS OWNER OF THE ACCOUNT  AND  THE  DATE  ON  WHICH  THE  DEBT  WAS
ASSIGNED TO THAT OWNER.
  7.  ANY  MATTERS  REQUIRED TO BE STATED WITH PARTICULARITY PURSUANT TO
RULE 3015 OF THIS ARTICLE.
  S 7. Subdivision (e) of rule 3211 of the civil practice law and rules,
as amended by chapter 616 of the laws of 2005, is  amended  to  read  as
follows:
  (e)  Number,  time  and waiver of objections; motion to plead over. At
any time before service of the responsive pleading is required, a  party
may  move  on one or more of the grounds set forth in subdivision (a) OF
THIS RULE, and no more than one such  motion  shall  be  permitted.  Any
objection  or  defense  based upon a ground set forth in paragraphs one,
three, four, five and six of subdivision (a)  OF  THIS  RULE  is  waived
unless  raised  either  by  such motion or in the responsive pleading. A
motion based upon a ground specified in paragraph two, seven or  ten  of
subdivision  (a) OF THIS RULE may be made at any subsequent time or in a
later pleading, if one is permitted; IN ANY ACTION OTHER THAN AN  ACTION
ARISING OUT OF A CONSUMER CREDIT TRANSACTION WHERE A PURCHASER, BORROWER
OR  DEBTOR  IS A DEFENDANT, an objection that the summons and complaint,
summons with notice, or notice of petition and petition was not properly
served is waived if, having raised such an objection in a pleading,  the
objecting  party  does not move for judgment on that ground within sixty
days after serving the pleading, unless the court extends the time  upon
the  ground of undue hardship. The foregoing sentence shall not apply in
any proceeding under subdivision one or two  of  section  seven  hundred
eleven  of  the real property actions and proceedings law. The papers in

S. 2454                             4                            A. 2678

opposition to a motion based on improper service shall contain a copy of
the proof of service, whether or  not  previously  filed.  An  objection
based  upon a ground specified in paragraph eight or nine of subdivision
(a)  OF  THIS  RULE is waived if a party moves on any of the grounds set
forth in subdivision (a) OF THIS RULE without raising such objection  or
if,  having  made no objection under subdivision (a) OF THIS RULE, he or
she does not raise such objection in the responsive pleading.
  S 8. Subdivision (f) of section 3215 of the  civil  practice  law  and
rules,  as  amended by chapter 453 of the laws of 2006, is amended and a
new subdivision (j) is added to read as follows:
  (f) Proof. On any application for judgment by default,  the  applicant
shall  file  proof  of  service  of  the summons and the complaint, or a
summons and notice served pursuant to subdivision (b)  of  rule  305  or
subdivision  (a)  of  rule  316  of this chapter, and proof of the facts
constituting the claim, the default and the amount due by affidavit made
by the party, or where the state of New York is the plaintiff, by  affi-
davit  made  by  an attorney from the office of the attorney general who
has or obtains knowledge of such facts through review of  state  records
or otherwise. Where a verified complaint has been served, it may be used
as the affidavit of the facts constituting the claim and the amount due;
in  such case, an affidavit as to the default shall be made by the party
or the party's attorney. IN AN ACTION ARISING OUT OF A  CONSUMER  CREDIT
TRANSACTION,  IF  THE PLAINTIFF IS NOT THE ORIGINAL CREDITOR, THE APPLI-
CANT SHALL INCLUDE: (I) AN AFFIDAVIT BY THE  ORIGINAL  CREDITOR  OF  THE
FACTS CONSTITUTING THE DEBT, THE DEFAULT IN PAYMENT, THE SALE OR ASSIGN-
MENT  OF THE DEBT, AND THE AMOUNT DUE AT THE TIME OF SALE OR ASSIGNMENT;
(II) FOR EACH SUBSEQUENT ASSIGNMENT OR SALE OF THE DEBT TO ANOTHER ENTI-
TY, AN AFFIDAVIT OF SALE OF THE DEBT BY THE DEBT  SELLER,  COMPLETED  BY
THE  SELLER  OR  ASSIGNOR;  AND  (III)  AN AFFIDAVIT OF A WITNESS OF THE
PLAINTIFF, WHICH INCLUDES A CHAIN OF TITLE OF THE DEBT, COMPLETED BY THE
PLAINTIFF OR PLAINTIFF'S WITNESS.  When  jurisdiction  is  based  on  an
attachment  of  property,  the  affidavit  must  state  that an order of
attachment granted in the action has been levied on the property of  the
defendant,  describe  the property and state its value. Proof of mailing
the notice required by subdivision (g) of this section,  where  applica-
ble, shall also be filed.
  (J)  A  REQUEST  FOR  A DEFAULT JUDGMENT ENTERED BY THE CLERK, MUST BE
ACCOMPANIED BY AN AFFIDAVIT BY THE DEBT COLLECTOR (WHO MAY BE THE PLAIN-
TIFF OR PLAINTIFF'S ATTORNEY) STATING THAT AFTER REASONABLE INQUIRY,  HE
OR  SHE  HAS  REASON  TO BELIEVE THAT THE STATUTE OF LIMITATIONS HAS NOT
EXPIRED.
  S 9. The civil practice law and rules  is  amended  by  adding  a  new
section 7515 to read as follows:
  S  7515.  CONFIRMATION  OF  AN AWARD BASED ON A CONSUMER CREDIT TRANS-
ACTION. IN ANY PROCEEDING UNDER SECTION 7510 OF THIS ARTICLE TO  CONFIRM
AN  AWARD  BASED  ON A CONSUMER CREDIT TRANSACTION, THE PARTY SEEKING TO
CONFIRM THE AWARD SHALL PLEAD THE ACTUAL TERMS  AND  CONDITIONS  OF  THE
AGREEMENT  TO  ARBITRATE. THE PARTY SHALL ATTACH TO ITS PETITION (1) THE
AGREEMENT TO ARBITRATE; (2) THE DEMAND  FOR  ARBITRATION  OR  NOTICE  OF
INTENTION  TO  ARBITRATE, WITH PROOF OF SERVICE; AND (3) THE ARBITRATION
AWARD, WITH PROOF OF SERVICE. IF THE AWARD DOES NOT CONTAIN A  STATEMENT
OF THE CLAIMS SUBMITTED FOR ARBITRATION, OF THE CLAIMS RULED UPON BY THE
ARBITRATOR,  AND OF THE CALCULATION OF FIGURES USED BY THE ARBITRATOR IN
ARRIVING AT THE AWARD, THEN THE PETITION SHALL CONTAIN SUCH A STATEMENT.
THE COURT SHALL NOT GRANT CONFIRMATION OF AN AWARD BASED ON  A  CONSUMER

S. 2454                             5                            A. 2678

CREDIT  TRANSACTION  UNLESS  THE  PARTY SEEKING TO CONFIRM THE AWARD HAS
COMPLIED WITH THIS SECTION.
  S 10. This act shall take effect on the first of January next succeed-
ing  the  date  on which it shall have become a law, except that section
three of this act shall take effect on  the  one  hundred  fiftieth  day
after this act shall have become a law.