On November 8, 2021, New York Government signed into law the Consumer Credit Fairness Act . The Act provides new requirements and prohibitions for debt collection in New York State and reduces the statute of limitations on suits filed by creditors from six years to three years.
Key Provisions Under the Act:
- Reduces the six-year statute of limitations for commencement of actions arising out of consumer credit transactions to three years.
- Establishes specific requirements for applications for default judgment in consumer credit transaction cases – including requiring a notice by mail to the consumer debtor by the clerk of the court;
- Requires specific documents a plaintiff creditor must provide in order to confirm an arbitration award – including the agreement to arbitrate, the demand for arbitration, the arbitration award, and the proof of service;
- Requires pleadings served on debtors in actions arising out of consumer credit transactions to be served with a summons to appear; and
- Requires the contract or written instrument on which an action arising out of a consumer credit transaction is based to be attached to the complaint.
- Most provisions of the Act took immediate effect, but the Act’s statute of limitations provision does not take effect until May 7, 2022.