State lawmakers in the final days of the legislative session approved a package of measures meant to bolster protections for consumers with credit card debt in the wake of a pandemic-induced recession that stretched household budgets. 

The bills seek to address the ways in which credit card companies and other creditors seek to recoup debt from consumers, the interest rates they charge and add protections for people who are at risk of being scammed.

Taken together, the measures are meant to provide added protections for New Yorkers who are facing high loads of credit card debt after more than a year of financial insecurity for many people amid the COVID-19 pandemic. 

“The Assembly Majority has long been committed to protecting the rights of consumers,” Assembly Speaker Carl Heastie said. “The COVID-19 pandemic created greater economic hardship for New Yorkers and made the passage of these bills that much more critical. This legislation will go a long way in protecting consumers from unscrupulous actors that prey on the vulnerable.”

The bills include:

  • Requirements for debt collectors who are pursuing civil litigation against consumers and reduce the statute of limitations for consumer credit actions from six years to three in order to avoid more lawsuits on old debt. 
  • Interest rates on uncollected consumer debt would be cut, including medical debt, from 9% to 2%. 
  • Contracts for the purchase or leasing of consumer goods would be barred from being set in far-flung locations that make it harder for a consumer to respond when facing legal action in a potential dispute. 
  • Protections for people in nursing homes would be enacted to ensure guardianship petitions for the purpose of collecting unpaid debt or to coerce settlement of debt with residents would be prohibited. 

“My colleagues and I in the Assembly Majority have championed these bills for years, but consumer protections became even more essential during the COVID-19 health and economic crisis,” said Assemblywoman Helene Weinstein. “My bills will help ensure that New Yorkers are protected from predatory practices that threaten their ability to pursue financial freedom and overcome debt.”