ALBANY, N.Y. (NEWS10) – As part of the 2020 State of the State, Governor Andrew Cuomo proposed Legislation to License and Regulate Debt Collection Companies.
The new proposal would require Debt collectors to be licensed by the State Department of Financial Services. The license will ideally impose strict standards of conduct on the Collection Companies. Then with new power the State could examine debt collectors and pull the license of bad actors.
The proposal will also codify a Federal Trade Commission rule that prohibits confessions of judgment, which give lenders the power to empty a citizens bank account, if the lender claims the borrower missed a payment.
Currently, debt collectors in New York State are regulated by the Department of Financial Services. However, since the Department does not license them, debt collectors are not subject to the same oversight as most other financial institutions.