In a development first announced by ACA International, the New York City Department of Consumer and Worker Protection (DCWP) has proposed an amendment to its new debt collection regulation. The amendment aims to clarify that the definition of a “debt collector” under the city’s Consumer Protection Law (CPL) explicitly includes creditors collecting their own debts.
Why it matters: The proposed rules reinforce that all persons or entities attempting to collect debts, including those collecting on their own accounts, fall within the scope of regulation. This change directly impacts original creditors who previously may not have considered themselves subject to these regulations.
Driving the news:
- The amendment seeks to address confusion among stakeholders about whether the CPL’s definition of a “debt collector” applies to original creditors.
- Unlike federal and New York state definitions, New York City’s regulations have never exempted original creditors from being defined as debt collectors.
- DCWP emphasized that the proposed changes are not new regulatory burdens, but clarifications meant to reinforce the original intent of the rules.
The details:
- The amendment clarifies that any person or entity that regularly collects debts — including those owed or due to themselves — will be deemed a debt collector under the CPL.
- Original creditors, not just third-party debt collectors, must adhere to the city’s debt collection regulations when dealing with NYC consumers.
Timeline:
- DCWP adopted amendments to the city’s debt collection rules in August 2024, initially set to take effect on December 1, 2024. However, the effective date has been pushed to April 1, 2025, in response to industry feedback.
How to get involved:
- Public comments on the proposed amendment are open until December 12. Comments can be submitted via email (rulecomments@dcwp.nyc.gov), mail, or through the NYC rules website.
- A public hearing will be held on December 12.
What’s next:
- The proposed rules are set to take effect on April 1, 2025, if adopted.
- ACA International has expressed concerns regarding the language and timing of these rules and has sued the city in federal court seeking declaratory and injunctive relief.
