S T A T E   O F   N E W   Y O R K
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                                  1752--A
                                                         Cal. No. 129
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 13, 2017
                                ___________
 
 Introduced by M. of A. WEINSTEIN, JAFFEE, TITONE, COLTON, GALEF, ABINAN-
   TI,   ZEBROWSKI,   O'DONNELL,   L. ROSENTHAL,   FAHY,  PEOPLES-STOKES,
   M. G. MILLER, DINOWITZ, SEAWRIGHT, OTIS, WEPRIN, MOSLEY -- Multi-Spon-
   sored by -- M. of A.   CAHILL,  COOK,  CYMBROWITZ,  GLICK,  GOTTFRIED,
   McDONOUGH, PERRY -- read once and referred to the Committee on Judici-
   ary  --  ordered  to  a  third reading, amended and ordered reprinted,
   retaining its place on the order of third reading
 
 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".
   § 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-G  of this article or article 2 of the uniform commer-
 cial code or article 36-B of the general business law;
   § 3. The civil practice law and rules  is  amended  by  adding  a  new
 section 214-g to read as follows:
   §  214-G.  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.
                                                            LBD02851-04-8

 A. 1752--A                          2
 
   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.
   §  4.  The  civil  practice  law  and rules is amended by adding a new
 section 306-d to read as follows:
   § 306-D. ADDITIONAL MAILING OF NOTICE IN AN ACTION ARISING  OUT  OF  A
 CONSUMER CREDIT TRANSACTION. (A) 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  UNSEALED 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:
                       ADDITIONAL NOTICE OF LAWSUIT
 
 (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 CONSUMER 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 RESPOND TO THE LAWSUIT, THE COURT MAY ENTER A MONEY  JUDG-
 MENT  AGAINST  YOU.  ONCE  ENTERED,  A  JUDGMENT IS GOOD AND CAN BE USED
 AGAINST YOU FOR TWENTY YEARS, AND  YOUR  PERSONAL  PROPERTY  AND  MONEY,
 INCLUDING  A  PORTION OF YOUR PAYCHECK AND/OR BANK ACCOUNT, MAY BE TAKEN
 FROM YOU.  ALSO, A JUDGMENT WILL AFFECT 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  AS
 SOON  AS POSSIBLE. YOU SHOULD BRING THIS NOTICE AND ANY LEGAL PAPERS YOU
 MAY HAVE RECEIVED.  ADDITIONAL INFORMATION CAN BE  FOUND  AT  THE  COURT
 SYSTEM WEBSITE AT:  WWW.NYCOURTS.GOV
   (B)  THE  FACE  OF THE ENVELOPE SHALL BE ADDRESSED TO THE DEFENDANT AT
 THE ADDRESS AT WHICH PROCESS WAS SERVED, AND SHALL CONTAIN  THE  DEFEND-
 ANT'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.
   (C)  THE  CLERK  PROMPTLY  SHALL  MAIL  TO  THE DEFENDANT THE ENVELOPE
 CONTAINING THE ADDITIONAL NOTICE SET FORTH IN SUBDIVISION  (A)  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.
 NO DEFAULT JUDGMENT BASED ON THE DEFENDANT'S FAILURE TO ANSWER SHALL  BE

 A. 1752--A                          3
 
 ENTERED IF THE ADDITIONAL NOTICE IS RETURNED TO THE COURT AS UNDELIVERA-
 BLE.  RECEIPT  OF THE ADDITIONAL NOTICE BY THE DEFENDANT DOES NOT CONFER
 JURISDICTION ON THE COURT IN THE ABSENCE OF PROPER SERVICE OF PROCESS.
   §  5.  Subdivision  (a)  of section 3012 of the civil practice law and
 rules is amended to read as follows:
   (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.
   §  6.    Rule  3016  of the civil practice law and rules is amended by
 adding a new subdivision (j) to read as follows:
   (J) 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. § 226.4;
   6. WHETHER THE PLAINTIFF IS THE ORIGINAL CREDITOR. IF THE PLAINTIFF IS
 NOT THE ORIGINAL CREDITOR, THE COMPLAINT SHALL ALSO STATE (I)  THE  DATE
 ON  WHICH  THE DEBT WAS SOLD OR ASSIGNED TO THE PLAINTIFF; (II) THE NAME
 OF EACH PREVIOUS OWNER OF THE ACCOUNT AND THE DATE ON WHICH THE DEBT WAS
 ASSIGNED TO THAT OWNER; AND (III) THE AMOUNT DUE AT THE TIME OF THE SALE
 OR ASSIGNMENT OF THE DEBT BY THE ORIGINAL CREDITOR; AND
   7. ANY MATTERS REQUIRED TO BE STATED WITH  PARTICULARITY  PURSUANT  TO
 SUBDIVISION (B) OF THIS RULE.
   § 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

 A. 1752--A                          4
 
 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
 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.
   §  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:  (1)  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;
 (2)  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 (3) AN AFFIDAVIT OF A WITNESS OF THE PLAIN-
 TIFF, 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.
   §  9.  The  civil  practice  law  and rules is amended by adding a new
 section 7516 to read as follows:
   § 7516. 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  (A)  THE
 AGREEMENT  TO  ARBITRATE;  (B)  THE  DEMAND FOR ARBITRATION OR NOTICE OF
 INTENTION TO ARBITRATE, WITH PROOF OF SERVICE; AND (C)  THE  ARBITRATION

 A. 1752--A                          5
 
 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
 CREDIT TRANSACTION UNLESS THE PARTY SEEKING TO  CONFIRM  THE  AWARD  HAS
 COMPLIED WITH THIS SECTION.
   § 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.