We have become aware that a recent law in New York shortened the statute of limitations to collect consumer debts. Does this affect our library’s ability to enforce and collect library fines?
Libraries likely do not have any statute of limitations for collecting overdue or replacement fines because the law does not consider library fines as “debts.” As such, any change to how long a “debt” may be collected does not matter for libraries. This privilege extends to third parties who collect fines on behalf of libraries. Let’s dive in deeper to help understand why.
In February of 2019, a different WNYLRC member had a question regarding libraries and patron bankruptcy. Part of that answer addressed whether bankruptcy discharged replacement and overdue fines due to the library. We advised the member that it was likely that overdue and replacement fines would not be discharged in bankruptcy because libraries do not engage in the types of “business dealings” that can create a “debt” in the first place. That answer was taking case law on debt collection and applying it to the bankruptcy context. Here, the same case law is much more directly applicable. Understanding the full picture, however, requires a step back to examine why these Federal cases are relevant to interpreting a recent New York State law.
In 2022, New York’s Consumer Credit Fairness Act (“CCFA”) went into effect. One of the provisions of the CCFA was reduction in the statute of limitations, from six to three years, for most types of consumer debt. The types of transactions the CCFA applies to are “consumer credit transactions.” That term is defined as “a transaction wherein credit is extended to an individual and the money, property, or service which is the subject of the transaction is primarily for personal, family or household purposes.”
There is no case law or official guidance in New York that directly addresses libraries. There are, however, interpretations of federal statutes, such as the Fair Debt Collection Practices Act (“FDCPA”), which use nearly identical terms to the New York statute. Under the FDCPA, a “debt” is defined as “[a]ny obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes.” Almost identical to New York’s definition under the CCFA. Given these similarities, and that most state debt-collection statutes are modeled on the analogous federal statutes, looking at federal interpretations is persuasive.
Tierney v. Unique is a 2018 federal case originating in South Carolina. There, a collection agency attempting to collect library fines on behalf of a library in Charleston was sued under the FDCPA. The court ruled in favor of the collection agency, holding that
“Plaintiff has failed to allege a proper claim, as he has not sufficiently pled that he has been the object of collection activity arising from ‘consumer debt.’ The borrowing of library materials, and the failure to return or timely return them which results in library fines, does not constitute such a ‘consumer debt.’”
Notably, in Tierney, the library had added an administrative cost to the fines to offset the expense and having to offload the collection’s effort to a third party. This did not seem to affect the judge’s decision. Tierney also cited a 1997 case from the Northern District of Illinois which provided a full explanation of why library fines are different from consumer debt and credit transactions. This is the case we previously explored in the bankruptcy context. In Riebe v. Juergensmeyer, the Court wrote that
“we agree with Defendants’ assertion that “public libraries do not engage in business transactions with patrons -- they lend public property to patrons, free of charge.” . . . A library is not a center of commerce but rather a “place dedicated to quiet, to knowledge, and to beauty,” and “a place to test or expand ideas . . . .” . . . Moreover, “an adequate library is essential for the dissemination of knowledge.” . . . “Its very purpose is to aid in the acquisition of knowledge through reading, writing and quiet contemplation.” . . . Unfortunately, when one fails to return library materials, he frustrates this purpose by depriving the public the full-use of the tremendous resources that a library has to offer. . . Consequently, the court finds that the borrowing of a library book is not the type of conduct that the FDCPA considers a transaction. As such, the ensuing obligation to pay for failure to return the book did not create a “debt” under the FDCPA.”
The takeaway is this: Libraries probably do not have any statute of limitations whatsoever for overdue and replacement fines—whether collected on their own behalf or sold to collection agencies. There are some limitations. For instance, if the library charges an upfront fee for a DVD—that could be outside the scope. For run-of-the-mill overdue and replacement fines, however, courts seem to say that libraries are free to collect such fines by whatever means and by whatever timeline they see fit. Since most library fines are not “debt,” the statutes of limitations that apply to “debt” are simply inapplicable.
There are two caveats to this answer. First, this reasoning likely applies to commonplace overdue and replacement fines, but not necessarily to every conceivable fine that may be imposed. As such, your library may wish to check its fine/fee/replacement policies and its collection contracts with collectors, to ensure they do not unknowingly create an enforcement limit where it would otherwise not apply. Members who want to ensure their specific policies and contracts do not create limits should confer with their attorneys for a written opinion.
Second, the fact that a certain action is legal does not mean that it is the right course of action for a particular library. Having libraries as a “free” resource has always been a goal in New York – and the Education Law which establishes the legal footing for libraries expressly states as such. In order to further this goal, some libraries have chosen to move towards a “fine-free” model. A recent article in the American Library Association delves into why this model may be becoming more common. That being said, every library is different, and fines may play a bigger or smaller role in maintaining core services. Any decision about fines and how aggressively to pursue them is ultimately a balancing act that each library must decide for themselves.