New York Unified Court System
John W. McConnell, Esq.,
Counsel, Office of Court Administration,
25 Beaver Street, 11 Fl.,
New York, New York 10004
As a likely affected party to the recent rules proposed by the New York Unified Court System, we are writing in general opposition to the rules proposed.
While we understand there has been a large amount of possible unethical behavior from a limited number of “bad players” in the debt industry who are abusing the New York court system, we believe that the proposed rules go too far and may eliminate far too many small businesses – not just debt buyers and collectors – which would be unable to meet the requirements set by the proposed rules. Any business which makes a contract with a consumer or which needs a loan from a bank would be negatively affected by such rules.
With too little money being lent by banks and other institutions due to the legal limitations and regulations set by government in collections, further regulation beyond reasonable rules (many already regulated under the FCRA and FDCPA) would limit the amount of money small businesses could borrow from lenders – and lack of such funding would lead to bad economic consequences due to further lack of economic activity.
Many of the documentation rules are written out of a lack of information about what records banks both retain and provide to debt buyers. Accounts are more and more being made online, or banks are digitally recording original documentation and are going “paperless” in an attempt to be more environmentally sound and save storage costs. Requiring originals, when good copies and general, legal information is available, places an undue burden on banks, collectors, attorneys, debt buyers, and debt sellers, and allows legitimate contracts to be denied – effectively allowing debtors to game the system and steal money.
While we understand the necessity to maintain a just legal system and that consumer protections are needed in a world of scandal, we believe that the problem is often overstated and a vocal minority is being allowed to overwhelm the system, rather than allowing a legitimate process which has been successful over time to work to enforce contractual obligations of both debtors and creditors.
As to several items creditors would like to see within the courts:
- Legal enforcement against debtors who make proven false claims against creditors.
- A “loser pays” system which would assist both sides in determining whether or not to bring legitimate suits.
- Clear rules about what legitimate copies are allowed when originals are not available.
- Preventing habitual offenders – both creditors and debtors – from continuing to abuse the system.
We thank you for your time and opportunity to comment. Please contact us with any questions or concerns.