Assembly member Helene E. Weinstein announced legislation signed into law by Gov. Hochul will ease the financial burden on New Yorkers with consumer debt judgments against them, especially low-income New Yorkers and those impacted financially by the COVID-19 pandemic (A.6474-A, Weinstein).
“The statutory judgment interest rate for consumer debt has not been adjusted in more than 40 years,” Weinstein said. “This law will have a real-life impact on the lives of so many – so they don’t have to choose between putting food on the table and paying off consumer debt. Simply stated, a 9% interest rate on consumer debt has had a crushing impact on lower- and middle-income New Yorkers, as debt collectors seek and enforce judgments for rent and mortgage arrears, medical debt, overdue credit card and utility bills, and student loans. If this change were not made, our 9% interest rate would continue to wreak havoc on New York’s lower- and middle-income communities.”
A press release noted, “The existing 9% interest rate has contributed to a growing number of unpaid judgment amounts and resulted in default judgments against consumers throughout the 2000s. The need for this change has also been exacerbated by the COVID-19 pandemic, which caused record unemployment, making it difficult for consumers to pay their bills, as well as to pay consumer debt judgments.
“This new law will apply an interest rate of 2% per annum prospectively to consumer debt judgments, and will also apply retrospectively to consumer debt judgments that are not yet fully paid as of the effective date.”
The bill was supported by more than 30 consumer advocacy and other groups, including AARP, Consumer Reports, DC37, Fordham Law School’s Feerick Center for Social Justice, the Legal Aid Society, Mobilization for Justice, and the NAACP.