b'New York Enacts New Law Protecting ConsumerLooking Ahead to 2022From Debt Collection LawsuitsIn November, New York Governor Kathy Hochul signedWe expect the CFPB to devote more energy to into law the Consumer Credit Fairness Act (NYCCFA).enforcement and regulation in the debt collection and The act amends the state civil practice rules and willdebt settlement space in the coming year. During his take effect May 6, 2022, except for the provisionstime at the FTC, Director Chopra was highly critical of relating to the revival or extension of the statute ofthe FTCs go-it-alone debt collection enforcement limitations, which will take effect April 6, 2022. strategy because he believed that it frequently leads The NYCCFA includes a number of provisions designedto outcomes where victims receive only a miniscule to afford consumers greater protections from debtpercentage of their losses. Instead, he advocated collection, including: shortening of the statute offor the FTC to work in concert with the Consumer limitations to enforce a debt from six years to threeFinancial Protection Bureau so that consumers could years; protecting borrowers who make a payment onbe made whole through the CFPBs civil penalty fund the debt from triggering a restart of the three-yearand the Bureaus authority to impose civil money statute of limitations period; additional documentationpenalties. requirements for collections actions arising fromDirector Chopra also criticized what he viewed as consumer credit transactions, such as attaching tothe FTCs Whack-a-Mole approach to policing the the complaint the contract the lawsuit is based on;debt collection industry. He noted that the CFPB and requirements of specialized notice to the courthas important tools that could significantly reform this if a collection action arising out of a consumer creditmarket, including the authority to issue a rulemaking transaction is filed or when summary judgment ison first-party debt collection that could ensure [c]sought against a pro se plaintiff in a collection actionommonsense rules for ensuring accuracy in the arising out of a consumer credit transaction. collection and sale of debt.CFPB Enters Into Consent Order with Yorba CapitalNow that Director Chopra leads the CFPB, look for the Management, LLC Over Alleged FDCPA Violations Bureau to pursue more systemic actionsincluding In April, the CFPB and Yorba Capital Management, LLCthrough the rulemaking processto reform what entered into a consent order to resolve allegations thatDirector Chopra sees as the industrys abuses.Yorba had violated the CFPA and FDCPA by falsely threatening consumers with legal action in the eventWhat to Watchthat they refused to pay their debt. Yorba mailed letters to consumers titled LITIGATION NOTICE and theContinued state enforcement, particularly by letters included a Case no. and caption similar to thatCalifornia and New York under their new debt of a court filing. The letters contained other languagecollection enforcement powers CFPB enforcement stating that a lawsuit may be the next step if theof new FDCPA rules;consumer did not pay, and implied that some form of legal action had already been commenced againstIncrease in the number of CFPB enforcement the consumer. The CFPB alleged, however, that Yorbaactions; andneither employed law firms or lawyers nor filed lawsuitsPotential CFPB rulemaking on first-party debt to enforce outstanding debt. The CFPB found thesecollection practices.practices to be deceptive under both the CFPB and the FDCPA. Under the consent order, Yorba agreed to a permanent ban from the debt collection industry.35'