CU Bill Providing Creditor Guidelines for Information Subpoenas Passed in Final Days of NYS Leg Session

ALBANY, NY (06/23/2011)(readMedia)-- During the final days of the New York State 2011 Legislative Session, the Assembly joined their Senate counterparts when they unanimously passed a bill June 22 that will establish stricter guidelines for creditors serving information subpoenas. The bill, sponsored by Assemblyman Joseph Lentol (D-Metropolitan) and Senator Stephen Saland (R-Catskill/Hudson), now moves to Governor Cuomo's desk, who we believe will sign the legislation into law.

When signed, the bill (S.4530/A.6875) would require creditors to keep records of their good-faith basis determinations for sending information subpoenas to credit unions. It would also authorize the imposition of civil penalties against creditors that do not keep such records and allow credit unions to sue creditors that send out 50 or more information subpoenas in a month without appropriate record keeping.

"This is an important step in the efforts of credit unions to curb the onslaught of subpoenas sent to credit unions daily in search of debtors who don't even qualify for credit union membership," said Michael Lanotte, SVP/General Counsel. "It has been the Association's top legislative priority this year."

In spite of changes in 2006 that required creditors to certify reasonable belief that a credit union has records or maintains a debtors' account(s), they simply and brazenly ignored the law without consequence.

The piles of information subpoenas kept coming-some credit unions receiving hundreds of requests daily. This caused them to unnecessarily redirect staff and resources to respond to these subpoenas, impacting service to their members. Ultimately, the vast majority of individuals named in these subpoenas were not, are not and could not be a member of a credit union."

"We want to thank the legislative sponsors of this bill for their support. Their leadership, together with support from their colleagues on both sides of the aisle, was vital to the bill's passage before this legislative session closed," said William J, Mellin, president/CEO of the Association."

The Credit Union Association of New York has served as the trade association for the state's credit unions for 94 years. New York credit unions have assets of more than $53 billion and serve 4.5 million members. To learn more about the Association, visit www.cuany.org.