Enacts the "consumer credit fairness act"; establishes a 3 year statute of limitations for commencement of a cause of action arising out of a consumer credit transaction where the defendant is a purchaser, borrower or debtor; establishes a notice of lawsuit which must be mailed to the defendant in such a cause of action; establishes certain requirements for the complaint in such an action; provides for arbitration of such actions.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2382
SPONSOR: Weinstein (MS) TITLE OF BILL:
An act to amend the civil practice law and rules and the judiciary law,
in relation to consumer credit transactions
SUMMARY OF PROVISIONS: OF BILL:
The bill would amend pleading requirements particular to consumer credit
actions by requiring that the complaint provide the name of the original
creditor, the last four digits of the account number printed on the most
recent monthly statement recording a purchase transaction, last payment,
or balance transfer, the date and amount of the last payment, an itemi-
zation of the amount sought, the account balance printed on the most
recent monthly statement recording a purchase transaction, last payment,
or balance transfer, and whether the plaintiff is the original creditor,
and if not, information about the sale and assignment of the debt. The
bill also requires that a copy of the contract or other written instru-
ment on which the action is based be attached to the complaint.
The bill would reduce the statute of limitations on consumer credit
actions from six years to three years.
The bill would permit defendants in consumer credit actions to raise
improper service as a defense in their answer and preserve that defense
for trial without having to file a separate motion to dismiss within 60
days as under current law.
It would require that an additional notice of a pending consumer credit
action be mailed to the defendant by the clerk of the court, with the
notice and mailing envelope provided by the plaintiff. This notice would
provide important information to the consumer credit defendant, includ-
ing the website address for consumer credit resources maintained by the
New York State Office of Court Administration. The chief administrative
judge would be required to make available Spanish translations of said
additional notices.
Similar in concept to the notice provided to the consumer upon commence-
ment of the action, the bill would require an additional notice advising
defendants in consumer credit actions against whom a summary judgment
motion has been made of the significance and consequence of such a
motion, and how to respond. It would also include the website address
for consumer credit resources maintained by the New York State Office of
Court Administration to assist consumer credit defendants in responding
to such motions.
To prevent the entry of default judgments on claims that lack merit, the
bill would require applications for default judgments in consumer credit
actions to conform with specific requirements. These include (1) an
affidavit by the original creditor of the facts constituting the debt,
the default in payment, the sale or assignment 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 entity, 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 plaintiff, which includes a chain
of title of the debt, completed by the plaintiff or plaintiffs witness.
The bill will also require that applications for default judgments in
consumer credit actions include a statement that after reasonable
inquiry, the plaintiff or its attorney has reason to believe that the
statute of limitations has not expired. Finally, the chief administra-
tive judge would be required to issue form affidavits for default
motions based upon consumer credit transactions, which would standardize
and make uniform the motion disposition process for the courts.
The bill would also provide similarly exacting requirements for consumer
creditors who seek to enter judgment based upon an arbitration award.
Finally, the bill clarifies § CPLR 5019(c) applies only to judgment
creditors.
JUSTIFICATION:
There have been serious concerns reported about the growing problem of
abusive debt collection practices, including filing suit on debts that
are too old to be sued on, are a result of identity theft or are debts
that have been paid or otherwise discharged. Original creditors, such as
credit card issuers, routinely sell large portfolios of consumer debt
accounts to debt buyers, who regularly re-sell the debts. Minimal infor-
mation or documentation is transferred to debt purchasers. The process
makes it difficult for a consumer to identify the debt, the current
owner, or amount claimed and results in collection efforts that continue
for years, including lawsuits filed after the statute of limitations has
expired. There have been instances in which a consumer paid a debt, but
was later contacted by another debt buyer attempting to collect it.
Other reported concerns include lack of notice to the defendant of the
law suit resulting in a default judgment against the defendant without a
requirement to produce proof of the debt sued on. These default judg-
ments are collected through wage garnishment and bank account
restraints, which is often the first time a consumer learns that they
were sued. Stopping garnishment and unfreezing bank accounts requires
that the consumer take action in court, but rarely do consumers have
attorneys to help. It is especially burdensome given the limitations on
daily life and the health challenges related to the COVID-19 pandemic.
The devastating toll that abusive debt collection lawsuits take on
consumers is a longstanding and persistent problem identified by numer-
ous governmental and public policy institutions up through this day. In
its 2010 report, Repairing A Broken System: Protecting Consumers in Debt
Collection Litigation and Arbitration. the Federal Trade Commission
recommended state-level reforms similar to those contained in this bill.
In 2016, Human Rights Watch made similar recommendations in a study
called Rubber Stamp Justice, which incorporated data supplied by the New
York court system. Most recently, in May 2020 The PEW Charitable Trusts
issued How Debt Collectors Are Transforming the Business of State
Courts, which noted, among many other things: "Debt collection lawsuits
that end in default judgment can have lasting consequences for consum-
ers' economic stability." (Page 17.) PEW also recommended a review of
state policies to ensure that both sides can effectively present their
cases. This bill responds to these calls for better delivery of justice
to consumer defendants.
Abusive debt collection lawsuits exploit current gaps in our State's
civil procedure laws and rules. The proposed legislation helps to fill
those gaps. In doing so, this legislation will protect all consumers,
and will particularly help ameliorate some of the forms of economic
abuse, including identity theft, suffered by domestic violence victims
at the hands of their abusers. At a hearing on economic abuse as a form
of domestic abuse, held on December 5, 2012, by the New York State
Assembly Committees on Judiciary and Codes, civil legal service provid-
ers, domestic violence prevention advocates and the Office of Court
Administration highlighted the insidious and pervasive nature of various
forms of economic abuse perpetrated by abusers in the family violence
context to exercise power and control over their victims and their
finances. The types of abuse cited included incurring debt in the
survivor's name through false statements or coercion, perpetrating iden-
tity theft or otherwise incurring debt without the survivor's knowledge.
Witnesses at the hearing cited this legislation as important and helpful
to meliorating economic abuse suffered by domestic abuse survivors.
This legislation requires statewide institution of additional notice
requirements that are presently in place through court rules and which
have indeed been helpful to consumer credit defendants, who rarely have
attorneys to represent them, even when they learn that they have been
sued. The notice provides basic understanding of the consequences of
legal actions taken against them and the importance of responding to the
lawsuit. It has also reduced the number of default judgments. There is a
significant and documented problem with faulty service that results in
default judgments with serious life-altering ramifications. Without
notice, defendants do not appear in court, and debt buyers easily obtain
default judgments. These judgments are enforced by freezing people's
bank accounts and garnishing their wages, hampering their ability to
then pay for basic necessities such as food, utilities, medication and
housing. These judgments appear are public records, making it close to
impossible for a consumer to secure housing or employment, or to take
out a loan. The provisions of this bill would protect all consumers and
domestic abuse survivors in particular, by ensuring that New Yorkers
receive actual notice of debt collection actions.
Current law allows debt collectors to provide minimal and vague informa-
tion in the complaint that initiates the case, making it very difficult
for consumers to identify the debt or the company collecting it. This
bill requires court papers to include more information about the debt
sued upon. This would ensure that all New Yorkers will be better able to
identify the debt on which they are being sued. There are many debts
that result from identity theft or mistaken identity and, in other situ-
ations the defendant may not recognize the debt as theirs from the mini-
mal information provided on the initial legal papers and may therefore
not respond. This legislation will be particularly important for domes-
tic violence survivors as it will help them identify the debt and assert
defenses in cases involving debts they did not voluntarily incur but
that were incurred by their abusers in the survivor's name.
This legislation will reduce the statute of limitations for consumer
credit actions from six to three years. Reducing the statute of limita-
tions requires creditors to file their claims while memories are fresh
and records are still available. States with three year statutes of
limitation include: Arizona, Arkansas, Delaware, Kansas, Louisiana,
Maryland, Mississippi, Montana, and the District of Columbia. Pennsylva-
nia has a two-year statute of limitation.
Debt collection actions are rife with poor service of process as
confirmed in numerous studies and by New York governmental institutions.
Indeed, questionable service of process is the reason for the exceeding-
ly high number of default judgments in consumer credit actions. Because
consumer defendants rarely have attorneys, improper service is a defense
they often unknowingly waive when they finally discover they have been
sued, even though service of process is a requirement of due process
rights afforded under the United States Constitution. Current law places
time limits on a defendant's right to assert improper service as a
defense or to seek dismissal of the case on this basis. To protect
consumers from unknowingly waiving this legitimate defense, the bill
would allow consumer defendants to assert improper service as a defense
and seek dismissal of the lawsuit beyond the time limits in current law.
Debt collection actions are also rife with faulty documentation and
debts that are too old to be sued on. To ensure that default judgment
applications in debt collection lawsuits are evaluated on the merits,
and that default judgments are not entered on time-barred debts, this
bill requires plaintiffs seeking default judgments to provide basic
proof of the debt, its entitlement to judgment, and the timeliness of
the lawsuit. This includes an affidavit from the original creditor with
proof of the debt and the consumer's default in payment. If the debt was
sold, affidavits proving the sale must be submitted to show that the
plaintiff is the current owner entitled to obtain the judgment. To
protect consumers from the entry of judgment on time-barred debts, this
bill would require that applications for default judgments in consumer
credit actions include a statement that the creditor or its attorney has
reason to believe that the statute of limitations has not expired.
This legislation will benefit all consumers and for domestic violence
survivors, it will go a long way toward helping break the cycle of
violence and domestic abuse that enables perpetrators of domestic abuse
to exercise control over their victims and their finances in a manner
that prevents the victim from leaving a dangerous relationship or which
forces them to return to it.
LEGISLATIVE HISTORY:
2020: A.6909-E/S.4827-E - A.Cal/S.Judi
2019: A.6909-AIS.4827-B - A.Cal/S.Rules
2018: A.1752-A/S.8959-A - A.Cal/S.Rules
2017: A.1752 - A.Cal.
2016: A.4438 - A. Judi
2015: A.4438 - A. Cal.
2013-14: Similar to A.9053/S.2454 - Passed Assembly/S. Judiciary
2011-12: Similar to A.633/S.677-A - Assembly Calendar/S. Judiciary
2010: A.7558-A/S.4398-A - Passed Assembly/S. Finance
2009: A.7558-A/S.439S-A - Passed Assembly/S. Codes
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
EFFECTIVE DATE:
Immediately; provided, however, that sections two, three, five, six,
seven, eight, nine, ten, eleven and twelve shall take effect on the one
hundred eightieth day after it shall have become a law and shall apply
to actions and proceedings commenced on or after such date; and
provided, further, that section four of this act shall take effect on
the one hundred fiftieth day after this act shall have become a law.
STATE OF NEW YORK
________________________________________________________________________
2382
2021-2022 Regular Sessions
IN ASSEMBLY
January 19, 2021
___________
Introduced by M. of A. WEINSTEIN, GALEF, ZEBROWSKI, O'DONNELL, FAHY,
PEOPLES-STOKES, L. ROSENTHAL, DINOWITZ, SEAWRIGHT, GLICK, WEPRIN,
TAYLOR -- Multi-Sponsored by -- M. of A. CAHILL, CYMBROWITZ, GOTT-
FRIED, McDONOUGH -- read once and referred to the Committee on Judici-
ary
AN ACT to amend the civil practice law and rules and the judiciary law,
in relation to consumer credit transactions
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "consumer credit fairness act".
3 § 2. Section 105 of the civil practice law and rules is amended by
4 adding two new subdivisions (h-1) and (q-1) to read as follows:
5 (h-1) Finance charge. The term "finance charge" means the cost of
6 consumer credit as a dollar amount, includes any charge payable directly
7 or indirectly by the consumer and imposed directly or indirectly by the
8 creditor as an incident to or a condition of the extension of credit,
9 and does not include any charge of a type payable in a comparable cash
10 transaction.
11 (q-1) Original creditor. The term "original creditor" means the entity
12 that owned a consumer credit account at the date of default giving rise
13 to a cause of action.
14 § 3. Subdivision 2 of section 213 of the civil practice law and rules,
15 as amended by chapter 709 of the laws of 1988, is amended to read as
16 follows:
17 2. an action upon a contractual obligation or liability, express or
18 implied, except as provided in section two hundred thirteen-a or two
19 hundred fourteen-i of this article or article 2 of the uniform commer-
20 cial code or article 36-B of the general business law;
21 § 4. The civil practice law and rules is amended by adding a new
22 section 214-i to read as follows:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00040-01-1
A. 2382 2
1 § 214-i. Certain actions arising out of consumer credit transactions
2 to be commenced within three years. An action arising out of a consumer
3 credit transaction where a purchaser, borrower or debtor is a defendant
4 must be commenced within three years, except as provided in section two
5 hundred thirteen-a of this article or article 2 of the uniform commer-
6 cial code or article 36-B of the general business law. Notwithstanding
7 any other provision of law, when the applicable limitations period
8 expires, any subsequent payment toward, written or oral affirmation of
9 or other activity on the debt does not revive or extend the limitations
10 period.
11 § 5. The civil practice law and rules is amended by adding a new
12 section 306-d to read as follows:
13 § 306-d. Additional mailing of notice in an action arising out of a
14 consumer credit transaction. (a) At the time of filing with the clerk of
15 the proof of service of the summons and complaint in an action arising
16 out of a consumer credit transaction, the plaintiff shall submit to the
17 clerk a stamped, unsealed envelope addressed to the defendant together
18 with a written notice in clear type of no less than twelve-point in
19 size, in both English and Spanish, and containing the following
20 language:
21 ADDITIONAL NOTICE OF LAWSUIT
22 (NAME OF COURT)
23 (COUNTY)
24 (STREET ADDRESS, ROOM NUMBER)
25 (CITY, STATE, ZIP CODE)
26 (NAME OF DEFENDANT)
27 (ADDRESS OF DEFENDANT)
28 Plaintiff:
29 Defendant:
30 Name of original creditor, unless same:
31 Index number:
32 Attention: a lawsuit has been filed against you claiming that you owe
33 money for an unpaid consumer debt.
34 You may wish to contact an attorney.
35 You should respond to the lawsuit as soon as possible by filing an
36 "answer" which may be done at the court clerk's office listed above.
37 If you do not respond to the lawsuit, the court may enter a money
38 judgment against you. Once entered, a judgment is good and can be used
39 against you for twenty years, and your personal property and money,
40 including a portion of your paycheck and/or bank account, may be taken
41 from you. Also, a judgment may affect your credit score and can affect
42 your ability to rent a home, find a job, or take out a loan.
43 You CANNOT be arrested or sent to jail for owing a debt.
44 Additional information can be found at the New York state court system
45 website.
46 Sources of information and assistance:
47 The court encourages you to inform yourself about your options as a
48 defendant in this lawsuit. In addition to seeking assistance from a
49 private attorney or legal aid office, there are free legal assistance
50 computer programs that you can use online to help you represent yourself
51 in this lawsuit.
A. 2382 3
1 For further information, or to locate a legal aid program near you, you
2 may visit the LawHelpNY website or the New York state court system
3 website, which has information for representing yourself and links to
4 other resources at: ___________________.
5 (b) The face of the envelope shall be addressed to the defendant at
6 the address at which process was served, and shall contain the defend-
7 ant's name, address (including apartment number) and zip code. The face
8 of the envelope also shall state the appropriate clerk's office as its
9 return address.
10 (c) The clerk promptly shall mail to the defendant the envelope
11 containing the additional notice set forth in subdivision (a) of this
12 section. No default judgment based on the defendant's failure to answer
13 shall be entered unless there has been compliance with this section, and
14 at least twenty days have elapsed from the date of mailing by the clerk.
15 No default judgment based on the defendant's failure to answer shall be
16 entered if the additional notice is returned to the court as undelivera-
17 ble. Receipt of the additional notice by the defendant does not confer
18 jurisdiction on the court in the absence of proper service of process.
19 (d) The chief administrative judge shall issue a Spanish translation
20 of the notice in subdivision (a) of this section and shall maintain and
21 publish the URL address for the web page containing consumer resources
22 for unrepresented litigants.
23 § 6. Subdivision (a) of section 3012 of the civil practice law and
24 rules is amended to read as follows:
25 (a) Service of pleadings. The complaint may be served with the
26 summons, except that in an action arising out of a consumer credit tran-
27 saction, the complaint shall be served with the summons. A subsequent
28 pleading asserting new or additional claims for relief shall be served
29 upon a party who has not appeared in the manner provided for service of
30 a summons. In any other case, a pleading shall be served in the manner
31 provided for service of papers generally. Service of an answer or reply
32 shall be made within twenty days after service of the pleading to which
33 it responds.
34 § 7. Rule 3016 of the civil practice law and rules is amended by
35 adding a new subdivision (j) to read as follows:
36 (j) Consumer credit transactions. In an action arising out of a
37 consumer credit transaction where a purchaser, borrower or debtor is a
38 defendant, the contract or other written instrument on which the action
39 is based shall be attached to the complaint, however, for the purposes
40 of this section, if the account was a revolving credit account, the
41 charge-off statement may be attached to the complaint instead of the
42 contract or other written instrument, and the following information
43 shall be set forth in the complaint:
44 (1) The name of the original creditor;
45 (2) The last four digits of the account number printed on the most
46 recent monthly statement recording a purchase transaction, last payment
47 or balance transfer;
48 (3) The date and amount of the last payment or, if no payment was
49 made, a statement that the purchaser, borrower or debtor made no payment
50 on the account;
51 (4) If the complaint contains a cause of action based on an account
52 stated, the date on or about which the final statement of account was
53 provided to the defendant;
54 (5) (A) Except as provided in subparagraph (B) of this paragraph, an
55 itemization of the amount sought, by (i) principal; (ii) finance charge
56 or charges; (iii) fees imposed by the original creditor; (iv) collection
A. 2382 4
1 costs; (v) attorney's fees; (vi) interest; and (vii) any other fees and
2 charges.
3 (B) If the account was a revolving credit account, an itemization of
4 the amount sought, by: (i) the total amount of the debt due as of
5 charge-off; (ii) the total amount of interest accrued since charge-off;
6 (iii) the total amount of non-interest charges or fees accrued since
7 charge-off; and (iv) the total amount of payments and/or credits made on
8 the debt since charge-off;
9 (6) The account balance printed on the most recent monthly statement
10 recording a purchase transaction, last payment or balance transfer;
11 (7) (A) Whether the plaintiff is the original creditor.
12 (B) If the plaintiff is not the original creditor, the complaint shall
13 also state (i) the date on which the debt was sold or assigned to the
14 plaintiff; (ii) the name of each previous owner of the account from the
15 original creditor to the plaintiff and the date on which the debt was
16 assigned to that owner by the original creditor or subsequent owner; and
17 (iii) the amount due at the time of the sale or assignment of the debt
18 by the original creditor; and
19 (8) Any matters required to be stated with particularity pursuant to
20 rule 3015 of this article.
21 § 8. Subdivision (e) of rule 3211 of the civil practice law and rules,
22 as amended by chapter 616 of the laws of 2005, is amended to read as
23 follows:
24 (e) Number, time and waiver of objections; motion to plead over. At
25 any time before service of the responsive pleading is required, a party
26 may move on one or more of the grounds set forth in subdivision (a) of
27 this rule, and no more than one such motion shall be permitted. Any
28 objection or defense based upon a ground set forth in paragraphs one,
29 three, four, five and six of subdivision (a) of this rule is waived
30 unless raised either by such motion or in the responsive pleading. A
31 motion based upon a ground specified in paragraph two, seven or ten of
32 subdivision (a) of this rule may be made at any subsequent time or in a
33 later pleading, if one is permitted; an objection that the summons and
34 complaint, summons with notice, or notice of petition and petition was
35 not properly served is waived if, having raised such an objection in a
36 pleading, the objecting party does not move for judgment on that ground
37 within sixty days after serving the pleading, unless the court extends
38 the time upon the ground of undue hardship. The foregoing sentence shall
39 not apply in any proceeding to collect a debt arising out of a consumer
40 credit transaction where a consumer is a defendant or under subdivision
41 one or two of section seven hundred eleven of the real property actions
42 and proceedings law. The papers in opposition to a motion based on
43 improper service shall contain a copy of the proof of service, whether
44 or not previously filed. An objection based upon a ground specified in
45 paragraph eight or nine of subdivision (a) of this rule is waived if a
46 party moves on any of the grounds set forth in subdivision (a) of this
47 rule without raising such objection or if, having made no objection
48 under subdivision (a) of this rule, he or she does not raise such
49 objection in the responsive pleading which, in any action to collect a
50 debt arising out of a consumer credit transaction where a consumer is a
51 defendant, includes any amended responsive pleading.
52 § 9. Rule 3212 of the civil practice law and rules is amended by
53 adding a new subdivision (j) to read as follows:
54 (j) Additional notice in any action to collect a debt arising out of
55 a consumer credit transaction where a consumer is a defendant.
A. 2382 5
1 1. At the time of service of a notice of motion any part of which
2 requests summary judgment in whole or in part, where the moving party
3 is a plaintiff and the respondent is a consumer defendant in an action
4 to collect a debt arising out of a consumer credit transaction, and
5 where the consumer defendant against whom summary judgment is sought is
6 not represented by an attorney, the plaintiff shall submit to the clerk
7 a stamped, unsealed envelope addressed to the defendant together with
8 the following additional notice in English and Spanish to be printed in
9 clear type no less than twelve-point in size:
10 IMPORTANT NOTICE
11 The Plaintiff has asked the Court to enter judgment against you by
12 making a Motion for Summary Judgment. Keep this Notice and the envelope
13 it came in. The Motion for Summary Judgment was separately served on
14 you. To avoid entry of judgment:
15 (1) You must appear in court as directed below:
16 WHERE: Name of Court, Street Address, Room Number
17 WHEN: Date and time
18 (2) You should oppose the motion IN WRITING.
19 HOW TO OPPOSE THE MOTION:
20 (1) State the legal reasons why the court should not enter judgment
21 against you, including your defenses.
22 (2) State the facts that support your defenses.
23 (3) Attach affidavits and/or exhibits to support the facts you assert.
24 (a) Affidavits are sworn statements of witnesses (including you) who
25 state facts they know to be true. The affidavit should state the facts
26 and how the witness knows them. Also, the affidavit should explain any
27 exhibits. An affidavit of service is an affidavit that states how and
28 when papers were served. An affidavit must be signed in front of a
29 notary. Free forms are available on the New York State Court system
30 website at: ____________________.
31 (b) Exhibits are copies of documents. Exhibits are usually attached to
32 affidavits.
33 (4) Have someone (not you or another defendant in the lawsuit) mail a
34 copy of your opposition to the plaintiff's attorney before your court
35 date and have them prepare an affidavit of service by mail.
36 (5) Bring a copy of your opposition and the affidavit of service to
37 your court date.
38 (6) Attend your court date.
39 IF YOU NEED MORE TIME:
40 If you need more time to prepare your written response, you should
41 appear at your court date and ask the judge for more time. You can also
42 ask the judge to refer you for legal help.
43 IF YOU NEED LEGAL HELP:
44 You may seek legal help from a private attorney or a legal aid office.
45 Some courts have free legal assistance programs for people without
46 lawyers. You can find resources on the New York State court system
47 website at: ____________________.
48 2. The clerk promptly shall mail to the defendant the envelope
49 containing the additional notice set forth in paragraph one of this
50 subdivision and note the date of mailing in the case record. Summary
51 judgment shall not be entered based on defendant's failure to oppose the
52 motion unless there has been compliance with this section and at least
53 fourteen days have elapsed from the date of mailing by the clerk or
54 nineteen days if the plaintiff's notice of motion demands additional
55 time under subdivision (b) of rule 2214 of this chapter.
A. 2382 6
1 3. The chief administrative judge shall issue a Spanish translation of
2 the notice in paragraph one of this subdivision and shall maintain and
3 publish the URL address for the web page containing consumer credit
4 resources for unrepresented litigants.
5 § 10. Section 3213 of the civil practice law and rules, as amended by
6 chapter 210 of the laws of 1969, is amended to read as follows:
7 § 3213. Motion for summary judgment in lieu of complaint. When an
8 action is based upon an instrument for the payment of money only or upon
9 any judgment, the plaintiff may serve with the summons a notice of
10 motion for summary judgment and the supporting papers in lieu of a
11 complaint. The summons served with such motion papers shall require the
12 defendant to submit answering papers on the motion within the time
13 provided in the notice of motion. The minimum time such motion shall be
14 noticed to be heard shall be as provided by subdivision (a) of rule 320
15 for making an appearance, depending upon the method of service. If the
16 plaintiff sets the hearing date of the motion later than the minimum
17 time therefor, he may require the defendant to serve a copy of his
18 answering papers upon him within such extended period of time, not
19 exceeding ten days, prior to such hearing date. No default judgment may
20 be entered pursuant to subdivision (a) of section 3215 prior to the
21 hearing date of the motion. If the motion is denied, the moving and
22 answering papers shall be deemed the complaint and answer, respectively,
23 unless the court orders otherwise. The additional notice required by
24 subdivision (j) of rule 3212 shall be applicable to a motion made pursu-
25 ant to this section in any action to collect a debt arising out of a
26 consumer credit transaction where a consumer is a defendant.
27 § 11. Subdivision (f) of section 3215 of the civil practice law and
28 rules, as amended by chapter 453 of the laws of 2006, is amended and a
29 new subdivision (j) is added to read as follows:
30 (f) Proof. On any application for judgment by default, the applicant
31 shall file proof of service of the summons and the complaint, or a
32 summons and notice served pursuant to subdivision (b) of rule 305 or
33 subdivision (a) of rule 316 of this chapter, and proof of the facts
34 constituting the claim, the default and the amount due by affidavit made
35 by the party, or where the state of New York is the plaintiff, by affi-
36 davit made by an attorney from the office of the attorney general who
37 has or obtains knowledge of such facts through review of state records
38 or otherwise. Where a verified complaint has been served, it may be used
39 as the affidavit of the facts constituting the claim and the amount due;
40 in such case, an affidavit as to the default shall be made by the party
41 or the party's attorney. In an action arising out of a consumer credit
42 transaction, if the plaintiff is not the original creditor, the appli-
43 cant shall include: (1) an affidavit by the original creditor of the
44 facts constituting the debt, the default in payment, the sale or assign-
45 ment of the debt, and the amount due at the time of sale or assignment;
46 (2) for each subsequent assignment or sale of the debt to another enti-
47 ty, an affidavit of sale of the debt by the debt seller, completed by
48 the seller or assignor; and (3) an affidavit of a witness of the plain-
49 tiff, which includes a chain of title of the debt, completed by the
50 plaintiff or plaintiff's witness. The chief administrative judge shall
51 issue form affidavits to satisfy the requirements of this subdivision
52 for consumer credit transactions. When jurisdiction is based on an
53 attachment of property, the affidavit must state that an order of
54 attachment granted in the action has been levied on the property of the
55 defendant, describe the property and state its value. Proof of mailing
A. 2382 7
1 the notice required by subdivision (g) of this section, where applica-
2 ble, shall also be filed.
3 (j) Affidavit. A request for a default judgment entered by the clerk,
4 must be accompanied by an affidavit by the plaintiff or plaintiff's
5 attorney stating that after reasonable inquiry, he or she has reason to
6 believe that the statute of limitations has not expired. The chief
7 administrative judge shall issue form affidavits to satisfy the require-
8 ments of this subdivision for consumer credit transactions.
9 § 12. The civil practice law and rules is amended by adding a new
10 section 7516 to read as follows:
11 § 7516. Confirmation of an award based on a consumer credit trans-
12 action. In any proceeding under section 7510 of this article to confirm
13 an award based on a consumer credit transaction, the party seeking to
14 confirm the award shall plead the actual terms and conditions of the
15 agreement to arbitrate. The party shall attach to its petition (a) the
16 agreement to arbitrate; (b) the demand for arbitration or notice of
17 intention to arbitrate, with proof of service; and (c) the arbitration
18 award, with proof of service. If the award does not contain a statement
19 of the claims submitted for arbitration, of the claims ruled upon by the
20 arbitrator, and of the calculation of figures used by the arbitrator in
21 arriving at the award, then the petition shall contain such a statement.
22 The court shall not grant confirmation of an award based on a consumer
23 credit transaction unless the party seeking to confirm the award has
24 complied with this section.
25 § 13. Subdivision 2 of section 212 of the judiciary law is amended by
26 adding a new paragraph (aa) to read as follows:
27 (aa) Not later than January first, two thousand twenty-two, make
28 available Spanish translations of the additional notices in consumer
29 credit transaction actions and proceedings required by section 306-d and
30 subdivision (j) of rule 3212 of the civil practice law and rules, and
31 make available form affidavits required for a motion for default judg-
32 ment in a consumer credit transaction action or proceeding required by
33 subdivision (f) of section 3215 of the civil practice law and rules.
34 § 14. Subdivision (c) of section 5019 of the civil practice law and
35 rules is amended to read as follows:
36 (c) Change in judgment creditor. A person other than the party recov-
37 ering a judgment who becomes entitled to enforce it, shall file in the
38 office of the clerk of the court in which the judgment was entered or,
39 in the case of a judgment of a court other than the supreme, county or a
40 family court which has been docketed by the clerk of the county in which
41 it was entered, in the office of such county clerk, a copy of the
42 instrument on which his authority is based, acknowledged in the form
43 required to entitle a deed to be recorded, or, if his authority is based
44 on a court order, a certified copy of the order. Upon such filing the
45 clerk shall make an appropriate entry on his docket of the judgment.
46 This subdivision shall not apply when there is a change to the owner of
47 a debt through a sale, assignment, or other transfer where no judgment
48 exists.
49 § 15. This act shall take effect immediately; provided, however, that
50 sections two, three, five, six, seven, eight, nine, ten, eleven and
51 twelve shall take effect on the one hundred eightieth day after it shall
52 have become a law and shall apply to actions and proceedings commenced
53 on or after such date; and provided, further, that section four of this
54 act shall take effect on the one hundred fiftieth day after this act
55 shall have become a law.
