New York City Dept. Announces Enforcement Delay Of Debt Collection Rules After Litigation

Recently, the New York City Department of Consumer and Worker Protection (DCWP) announced a delay enforcing Title 6 of the Rules of the City of New York which impact debt collectors. Although the new rules will still take effect on December 1, as planned, the DCWP announced it will not enforce the new rules until April 1, 2025.

On its website, the DCWP posted the following notice: “In response to industry requests, DCWP will not be enforcing the new Debt Collector Rules until April 1, 2025. We will address this grace period for compliance during our DCWP 101: Free Webinar on New Rules for Debt Collectors on Thursday, November 7, 2024[,] at 2:00 p.m.”

As previously covered by InfoBytes, the new debt collection rules require debt collectors to provide specific disclosures when collecting on time-barred debt, maintain comprehensive records of communications, consumer complaints, and other relevant documents, and obtain consumer consent for electronic communications with clear opt-out options.

The DCWP’s announcement came one day after the agency received a lawsuit from two stakeholders (an industry association and a debt-collection agency). The stakeholders filed a complaint for declaratory and injunctive relief against the DCWP, arguing that the debt collection rules violate the First, Fifth and Fourteenth Amendments and are preempted by federal and state law. The stakeholders seek a declaratory judgment invalidating several sections of the rule and a permanent injunction preventing its enactment or enforcement.