Report on The Uniform Credit Code Consumers' Advisory Council Department of Consumer Affairs New York City, N. Y. The Consumers' Advisory Council, appointed by Mayor John V. Lindsay in October, 1968, pursuant to Chapter 64, Section 2204 of the City Charter, has undertaken as one of its first projects a study of the Uniform Consumer Credit Code, which is being introduced in the State Legislature this year. This Code would affect nearly every aspect of consumer lending and selling; it should therefore be studied in painstaking detail by the Legislature and by the public before action is taken. The Council believes that the public has not had sufficient time to make this detailed study, and that legislative action this year should be limited to the holding of informational hearings. Our analysis so far has revealed several areas in which the code offers consumers less protection than present New York law, and other areas where Code sections should be strengthened to render them of true value to buyers and borrowers. Our recommendations are detailed in the accompanying report. The Council will continue to study the Code and all other proposed federal, state and city legislation of concern to the consumers of New York City. We look forward to working with you to strengthen all of the laws so that fair treatment of consumers will be assured. Sincerely, PHILIP G. SCHRAG REPORT ON THE UNIFORM CONSUMER CREDIT CODE The Uniform Consumer Credit Code, prepared by the National Conference of Commissioners on Uniform State Laws, is being introduced in state legislatures, including the New York State Legislature, for the first time this year. The Code attempts to be a comprehensive statute governing the rights of the parties and of the state in consumer credit transactions, including all types of consumer loans and credit sales. A preliminary study of the Code from the consumer's viewpoint indicates that it is far from ideal. We have identified some areas where the Code is weaker than present New York State law in protecting consumers, and other areas where the Code sections are only token improvements in the law and should be amended before adoption. Most important, we believe that consumer groups have not had sufficient time to analyze the effect of the Code, and we recommend that the legislature defer action on it until a fuller study has been made by all groups concerned. THE PURPOSE OF THE CODE The Code attempts to replace a patchwork of fragmented and overlapping laws, differing in different states, which deal in limited ways with aspects of the credit industry, with a comprehensive statute regulating all aspects of consumer credit sales and loans (including some credit related to the financing of homes and some agricultural credit).1 Since many consumer credit operations are now conducted on a national scale, and consumers move from state to state, it is desirable to have credit laws which are uniform as well as fair to debtors and creditors. The Code makes some significant changes in the practices and the structure of the credit industry.2 The most significant change is the 1 The fact that the Code is comprehensive does not mean that it is so allencompassing as to preclude or pre-empt consistent supplementary legislation by municipalities. The Council believes that should the need arise for such additional legislation in view of local problems and conditions, cities such as New York City could adopt administrative or legislative means of furthering the policies of the Code. 2 This report is not a complete analysis of the Code. A more extensive discussion, written by two professors who served as Reporters-Draftsmen of the Code, is Jordan and Warren, "The Uniform Consumer Credit Code", 68 Colum. L. Rev. 387 (1968). An excellent analysis from a creditor's perspective is Kripke, "Consumer Credit Regulation: A Creditor-Oriented Viewpoint", 68 Colum. L. Rev. 445 (1968). A thoughtful critique, from the consumer's viewpoint, appears in Consumer Reports, March, 1969. |