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The state has reached a settlement with five payday lenders under which they would be prevented from collecting on certain loans and pay restitution to customers, Eric Schneiderman's office announced Monday.
September 30 -
The New York bank took the move one month after signing a consent order with the Office of the Comptroller of the Currency to settle allegations that it took shortcuts in collecting consumer debts. But with accusations of "robo-signing" still fresh, and a related suit by California's attorney general pending, the bank could face a new wave of legal troubles.
October 17 -
Alex Dunlap, the former director of debt sales for Wells Fargo, has left the bank for Flock Specialty Finance. His move comes after Wells stopped selling unpaid consumer loans to outside buyers and as regulators crack down on banks' debt collection practices.
August 21 -
California accused JPMorgan of illegal tactics to sue thousands of credit card borrowers behind on their debts, including "robo-signing."
May 9 -
New York financial regulator Benjamin Lawsky has proposed rules that would require improved record keeping and overhaul other practices at banks and third-party debt collectors.
July 25
New York financial regulator Benjamin Lawsky is urging the state to make it harder for debt collectors to win court judgments using shoddy documentation.
Lawsky, superintendent of New York's Department of Financial Services,
The rules would require collectors to include more supporting information in the court documents they file to recoup debts, thereby preventing the mass-filing of complaints with faulty affidavits and without details or documentation, a practice known as robo-signing.
Affidavits would have to include details such as the date of the chargeoff and last payment, and plaintiffs would have to attest that they have personal knowledge of the debtors' records.
"It is intolerable for professional collection companies to abuse the justice system and use the courts as a tool for collecting unverifiable debts from consumers who never had a fair opportunity to contest them," Lawsky writes in his letter.
Lawsky joined the mounting regulatory crackdown on debt-collection practices in July, when he
The letter responds to the court's proposal to require standardized affidavits statewide, a practice that only the New York City courts currently require. Lawsky cites a
Other reforms Lawsky proposed include requiring debt collectors to include loan documentation in their complaints, and to notify consumers before beginning a collection action. Consumers would be allowed to reverse default judgments if the collector fails to follow the court's rules.
Regulators are increasingly turning their attention to the documentation of consumer debt on the part of banks and the companies they sell debt. In May the California attorney general
Last month New York Attorney general
