ACA International on Friday sent out an alert to its members letting them know that the association, on behalf of one of its members, has filed a lawsuit seeking to block the enactment of debt collection rules that are slated to go into effect in New York City in December. The suit, filed against New York City Mayor Eric Adams, the city’s Department of Consumer and Worker Protection, and DCWP Commissioner Vilda Vera Mayuga, argues that the new rule, which is set to take effect on December 1, violates the Constitution and is preempted by federal and state law.
The lawsuit makes several claims, primarily centered around violations of the First and Fourteenth Amendments. One of the key arguments is that the rule discriminates against debt collectors by limiting their ability to communicate with consumers, a restriction the plaintiffs argue violates their right to free speech. Specifically, the rule limits the number of times a debt collector can attempt to contact a consumer, regardless of the communication method, to just three times per week. The plaintiffs argue that this cap is arbitrary and hinders their ability to resolve debts efficiently.
Additionally, the lawsuit claims that the rule’s vague and contradictory requirements violate due process under the Fourteenth Amendment. For example, the plaintiffs point out that the rule requires debt collectors to provide specific disclosures that may not always apply to certain types of debts, which could lead to confusion and legal risks for collection agencies.
The plaintiffs also argue that the rule is preempted by federal law, specifically the Fair Debt Collection Practices Act and Regulation F, both of which already impose strict regulations on debt collection practices.
“In this case, the DCWP created 55 new requirements for debt collectors, most requiring significant changes to existing systems and processes — but only gave 76 business days to implement the changes, whereas the Consumer Financial Protection Bureau provided a full year to implement Regulation F,” said Scott Purcell, the association’s chief executive, in the alert.
