New York Attorney General Letitia James has released a guide to help residents of New York safeguard their finances from predatory debt collectors by utilizing the state's Exempt Income Protection Act (EIPA). This state law aims to prevent debt collectors from draining consumers' bank accounts, ensuring they have sufficient funds for basic needs. The law provides automatic protection for a specified amount in individuals' bank accounts and safeguards vital government benefits like Social Security and veteran's benefits.
The release of this guide follows Attorney General James securing $1 million from Netspend, a financial services company that illegally handed over customer funds to debt collectors in violation of EIPA. "When banks allow debt collectors to wipe out New Yorkers’ bank accounts, they’re not only throwing vulnerable people into financial chaos, they’re breaking the law," stated Attorney General James. She emphasized the importance of understanding these protections so individuals can manage their debts while covering essential expenses.
As of January 2025, the EIPA protects $3,960 in bank accounts within New York City, Long Island, or Westchester and $3,720 elsewhere in the state. Additionally, it shields 90% of wages earned within 60 days prior to a seizure attempt by a debt collector. The act also covers various government benefits and retirement funds from being seized.
Attorney General James has been active in ensuring restitution for those affected by illegal seizures. In recent years, she secured significant sums from Pathward Bank and a debt collection firm for violations involving frozen accounts and frivolous lawsuits against tenants.
The Office of the Attorney General’s guide details how New Yorkers can utilize EIPA to protect their assets and report any violations to the Consumer Frauds Bureau online or via phone.
This initiative was managed by Assistant Attorneys General Ben Fishman and Chris Filburn under supervision from Bureau Chief Jane M. Azia and Deputy Bureau Chief Laura J. Levine, with assistance from various members across different units including Public Information and Correspondence Unit led by Brandon Kennedy.