Bill > A05537

This bill establishes a comprehensive licensing and regulatory framework for consumer debt collectors in New York State. It requires all consumer debt collectors operating within the state to obtain a license from the superintendent of financial services, with detailed application requirements including background checks, financial responsibility assessments, and disclosure of business practices. The bill mandates that licensed debt collectors maintain a surety bond based on their gross profits, keep detailed records, and adhere to strict communication and collection standards. Collectors are prohibited from engaging in unfair, deceptive, or abusive practices, with specific restrictions on communication methods, such as limiting phone calls and prohibiting contact at inconvenient times or places. The bill also introduces significant penalties for violations, including civil penalties up to $500 per collection attempt or $100,000 in total damages, and provides the superintendent with authority to suspend or revoke licenses for misconduct. Additionally, the bill adds provisions to the civil practice law that prohibit certain judgments by confession for consumer debts and nullify judgments obtained by unlicensed debt collectors. The licensing requirements will take effect on January 1, 2028, giving debt collectors time to prepare and apply for licenses, with the broader act becoming effective 180 days after passage.

Business and Industry

https://www.nysenate.gov/legislation/bills/2025/A5537