The New York City Department of Consumer and Worker Protection, or DCWP, today finalized amendments to its debt collection rules that will apply to banks and other original creditors when collecting debts from New York City consumers. The rule becomes effective Sept. 1, concluding a multi-year rulemaking process that began in 2022.
The final rule confirms that banks collecting their own debts are subject to the rule’s requirements once they engage in “debt collection procedures,” replacing prior proposed language that would have applied requirements “at the initiation of debt collection procedures.” DCWP said the rule does not apply to routine servicing or ordinary customer service interactions, but rather applies once an account enters collections.
The rule imposes several new and expanded compliance obligations on covered banks, which are far more restrictive than those required by the federal Fair Debt Collection Practices Act (FDCPA) and Regulation F, including stricter limits on collection communications (including electronic communications), enhanced validation and credit reporting notice requirements, and extensive recordkeeping and documentation requirements.
