New York Gov. Andrew Cuomo unveiled a proposal yesterday that would enact legislation to license debt collectors operating in The Empire State and provide the state’s Department of Financial Services with more powers to regulate, investigate, and take enforcement actions against debt collectors.
“We license barbers, home inspectors and used car dealers in New York – so it makes no sense that we don’t have the authority to license an industry that can cause families financial ruin,” Gov. Cuomo said in announcing his proposal. “As this industry grows and increasingly deploys abusive and deceptive practices to prey on consumers, this proposal would give the state new tools to regulate debt collectors – stopping unscrupulous practices and strengthening our consumer protection laws.”
Currently, the state does not have much enforcement authority over the debt collection industry, Gov. Cuomo alleges. Because the DFS does not license collection agencies, the regulator is limited in its oversight of the industry. Under the proposal, which would require amendments to be passed in the state legislature, collection agencies would require a license to operate in New York, and the DFS would “be empowered to examine and investigate, including requiring the submission of information or sending investigators to debt collector’s offices at any time to review their books and records,” according to the governor’s office. Giving the DFS the added authority would allow it to take administrative action against alleged infractions. The state would also create a database that consumers would be able to use to confirm a collector’s credentials to ensure the collector is licensed and not a fraudulent or unscrupulous operation seeking to scam consumers.
“When New Yorkers already struggle to make ends meet, the last thing they should be worried about is being subjected to unscrupulous debt collection practices,” said David R. Jones, president and chief executive of Community Service Society, an advocacy group in New York, in a statement
