Legislation - Trenton
The N.J. Tax Lien Foreclosure Law is Still Unconstitutional​​
The United States Supreme Court, in Tyler v. Hennepin County, MN, 598 U.S. 631 (2023), held that the Minnesota tax-lien law resulted in an unconstitutional “taking” of the homeowner’s equity, without just compensation, violating the Fifth Amendment, because that law seized the homeowner’s entire equity, far in excess of the taxes owed. “The taxpayer must render unto Caesar what is Caesar’s, but no more.” In New Jersey, a speculator who pays, $1,000 of a senior’s late taxes, for example, can foreclose a $300,000 home after two years. The New Jersey Supreme Court held that N.J.’s former tax-lien law was unconstitutional. 257-261 20th Avenue Realty, LLC v. Alessandro Roberto (N.J., No A 29-23, Jan. 9, 2025). Unfortunately, the N.J. Legislature then passed a 2025 law, P.L.2024, c.39, which still allows speculators to take a $300,000 house for a $1,000 tax payment. To prevent this forfeiture, the homeowner must affirmatively request a Sheriff Sale in writing. Unlike tax lien forfeiture, a Sheriff Sale is open to the public, and could in theory have more than one bidder, but is unlikely to bring fair market value, the law’s first flaw. The second problem is that the new law’s requirement-- for the homeowner to request Sheriff sale-- is a cruel psychological trick. The homeowner wants to keep the home if possible. To request a Sheriff sale is the last thing a desperate homeowner is likely to do. If the homeowner does not request a Sheriff Sale, then the house is simply transferred to the speculator—the same method found unconstitutional in Tyler and Roberto.
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Amending Legislation is needed to provide N.J. homeowners with the full protection of the Fifth Amendment, and Tyler and Roberto decisions, to prevent the unconstitutional “taking” of their home equity via N.J statutes without just compensation. But just compensation means fair market value, minus taxes owed.
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Which states have better procedures? With some variations, the laws of Oregon, Maine and Massachusetts mandate bona fide efforts to obtain just compensation for the taking of the home, by first listing properties for sale at market value via real estate brokers or real estate agents. If a realtor listing is unable to proceed in Oregon, then a public auction is allowed where the minimum strike price at auction is 2/3rds of fair market value – as opposed to cents-per dollar tax judgment amounts that may occur in states like New Jersey. Maine requires lienholders to list foreclosed properties with real estate brokers and accept the best offer made within twelve months of the listing and authorizes other sale processes (that also mandate payment of surplus equity), if lienholders are unable to list or sell the property through an agent. Massachusetts shares components of the Oregon and Maine statutes: lienholders must list the property for twelve months and accept the best offer, and if no offers, then may proceed to public auction with a 2/3rds appraised-value strike price.
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The Oregon, Maine and Massachusetts research is credited to Legal Services of New Jersey, from their amicus brief, in Pung v. Isabella County, Michigan, No. 25-95, before the Supreme Court of the United States. Mr. Pung is suing for just compensation, at fair market value. Mr. Pung states that a Sheriff Sale after tax foreclosure did not pay “just compensation” for the taking of his property by the government. CLNJ hopes that the Supreme Court in the Pung case will require fair market value to be obtained. In the meantime, New Jersey ought to enact a new statute with a mechanism to pay homeowners the fair market value of their lost equity.
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Consumers League of New Jersey has a further explanation of current N.J. tax lien procedure at https://www.consumersleaguenj.org/tax-lien-foreclosure.
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More Legislative Issues
New Jersey has no Homestead Law to protect homeowners from losing their homes due to judgments for credit card and medical debt. Forty-eight states and the District of Columbia offer some homestead protection. Texas and Florida protect the entire home equity. New York protects $204,825 per debtor in downstate counties. N.J. homeowners with significant equity (senior citizens, for example) can be prevented from declaring bankruptcy because their home would have to be surrendered and sold. Debtors in Florida and Texas can file bankruptcy, while keeping their homes. Why should only New Jersey homeowners suffer?
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Criminal Usury Law
The first consumer protection laws were usury laws, setting a maximum interest rate. New Jersey has had usury laws continuously since colonial days. Currently the Criminal Usury Law, N.J.S.A. 2C:21-19 sets a 30 percent limit for all transactions which New Jersey can regulate. Perez v. Rent-A-Center, 186 N.J. 188 (2006) held that rent to own transactions were subject to the N.J. Retail Installment Sales Act, and the 30% criminal usury limit. Violations of that 30% limit would violate the Consumer Fraud Act, N.J.S.A. 56:8-1 et seq. Id. The Supreme Court accepted the argument of amicus Consumers League of New Jersey, that the Legislature and Governor in bills S. 3101 and S. 3005 (P.L. 1981, Ch. 103 and 104), intended a 30% interest ceiling for all creditors.
In some Florida strip malls, one sees payday lender stores and pawnbrokers lined up in a row. Because New Jersey’s criminal usury law protects our consumers, you will not see in New Jersey brick and mortar stores pitching pay day loans, auto title loans and similar businesses offering 500% APR credit. The current threat to New Jersey consumers comes from the Internet. The so-called “fintech” companies lend at 100% and up and claim immunity from N.J. law. But Turner v. Aldens, Inc., 179 N.J. Super. 596 (App. Div. 1981) held that N.J. law applies to out-of-state credit financiers. Legal services attorneys have fought out-of-state finance companies who claimed that credit sales of furniture (and dogs), at stores in New Jersey, were somehow “leases” exempt from N.J. usury laws! None of these companies ever repossessed the furniture, much less the dogs. N.J. consumers who do borrow money from internet payday lenders fall into a never-ending trap of duplicitous debt. The New York Attorney General in 2024 sued payday lenders over wage-advance loans with high fees and “tips.”
The Consumers League of New Jersey has filed a comment with the Federal Reserve Board opposing a proposal to form a national bank, made by a company which has been accused of charging sky high interest. National banks can evade state usury laws by federal preemption, hence federal charters should not be used to make usury easy.
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Consumer Fraud Act
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New Jersey’s Consumer Fraud Act, N.J.S.A. 56:8-1 et seq., is one of the strongest in the country. Some classic court decisions:
Kugler v Romain, 58 N.J. 522 (1971)(price unconscionability--high price of dubious
“educational” goods was unconscionable, and CFA violation)
Lemelledo v. Beneficial Management Corp. of America, 150 N.J. 255 (1997)(CFA applies to lender
which packed small loan with credit insurance products)
Cox v. Sears, Roebuck & Co., 138 N.J. 2 (1994)(Consumer cheated by home repair contractor
had “ascertainable loss” if consumer could prove the amount still needed to remedy the
defective construction of kitchen; Prior payment of repairs was not required. Violation
of Div. of Consumer Affairs Regulation was CFA violation)
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Note that some court decisions have attempted to deny CFA protection by making it harder to prove “any ascertainable loss of moneys or property” required by N.J.S.A. 56:8-19. E.g., Robey v. SPARC Grp. LLC, 256 N.J. 541 (2024) (no ascertainable loss for purchasing deceptively marketed (“fake-discount”) clothing). This is a trend which should be opposed by consumer advocates.
Private debt adjusters: Consumers League of New Jersey and the National Association of Consumer Advocates successfully urged Governor Murphy to veto S-1310/A-4598 (would have allowed for-profit debt adjusters), which he did by pocket veto on January 20, 2026. For-profit debt adjusters, currently banned by N.J. law, but whose ads are seen by N.J. consumers, take direct deposits from consumer bank accounts into a kitty held by the debt adjuster. After some years, with $7,000 in the debt adjuster’s bank, the adjuster takes $3,500 as their fee, and only then offers 50% settlements to banks. The banks do not have to accept those settlements. Meanwhile default has ruined the consumer’s credit rating, and often the bank has sued the consumer. In contrast, non-profit credit counselors, licensed by N.J., negotiate at the beginning with banks to get them to accept reduced payments. The consumer pays the credit counselor monthly, then the counselor divides the payment among accepting banks.
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Rent to own
New Jersey is one of the very few states that imposes meaningful limits on rent to own, by the Perez v. Rent-A-Center decision of our Supreme Court. These limits have been under frequent attack from the industry. All should watch out for lobbyists and legislative attempts to legalize rent to own as an exception to the criminal usury law. Prior unsuccessful bills either allowed RTO unlimited interest (by falsely stating RTO does not charge interest!), or allowed RTO to double a cash price of their choosing for 18 month contracts. All of those RTO formulas allowed interest at over 100% APR to buy the item. RTO is prevalent in poor urban and military areas. We must watch that RTO does not try to overturn the Supreme Court’s Perez v. Rent-A-Center, a case which was then settled with refunds for thousands of N.J. consumers.
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Scott Diana v. LVNV Funding LLC, et al., No. 089939, is a pending case recently argued in the N.J. Supreme Court, which if decided in favor of the creditor, could remove the consumer’s ability to sue for triple damages and voiding of loans, remedies set forth in the licensed lender statute. Defendant argued that only the Commissioner of Banking could enforce these remedies. CLNJ says: why would the Legislature put a triple damages remedy in a law and not intend the consumer, the beneficiary, to use it? The Commissioner of Banking does not have the time or staff to examine 100,000 debt collection suits/year for violations.
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The N.J. Retail Installment Sales Act, N.J.S.A. 17:16C-1, applies to sales on credit where the goods have a value of $10,000 or less. This figure was set in 1960 when the average cost of a new car was $2,700. Since new car sales averaged $50,000 in 2025, the RISA should be amended to apply to credit sales of $75,000 at least.
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The New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA), N.J.S.A. 56:12-15, protects consumers by prohibiting sellers from using illegal or deceptive provisions in consumer contracts, warranties, or notices. TCCWNA has been given a very restrictive interpretation, which should be broadened. E.g., Spade v. Select Comfort Corp., 232 N.J. 504 (2018) (holding a consumer who received a contract that included language prohibited by § 13:45A-5.3(c), but who suffered no monetary or other harm as a result of that noncompliance, was not an "aggrieved consumer" entitled to a remedy under the TCCWNA).
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Regulate “Junk Fees” In Residential Leases
New Jersey should regulate junk fees in residential leases, because hidden and excessive add-on charges undermine transparency and make it nearly impossible for tenants to understand the true cost of housing. In a high-rent state like New Jersey, unregulated administrative, “processing,” and convenience fees function as backdoor rent increases that disproportionately burden working families and seniors. Clear statewide standards would promote fairness, reduce disputes, and create a more predictable rental market for both tenants and responsible landlords.
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Governor issues pocket veto of S1310/A4598, re private debt adjusters
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Consumers League of New Jersey, along with the National Association of Consumer Advocates, contacted Governor Phil Murphy, urging a veto of S1310, which would have legalized private debt adjustment companies in New Jersey.
By Internet, TV and radio advertising, some private debt adjusters lure consumers to create a kitty by deducting funds from the consumer's bank account, sent to the debt adjuster for many months. Years later, when these companies have collected $7,000, for example, they take $3,500 as their fee, and make offers of 50 cents on the dollar to the credit-card banks. The banks do NOT have to accept less than 100 percent. Meanwhile, the banks have sued the consumers, whose credit has been ruined by defaulting on their credit card payments. CLNJ supports the existing NJ law (NJSA 17:16G-1 et seq.) which in general makes this scheme illegal in New Jersey for private companies. Governor Murphy killed the bill S1310 with a pocket veto on January 20, 2026.
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Nonprofit credit counseling works differently. Counselors make a budget and figure out what the consumer can afford to pay each month. Counselors call the banks immediately and get agreements from the banks to accept reduced payments. The consumer makes one payment to the nonprofit counseling agency (with a small monthly fee). The agency then divides the payment, and pays the banks each month. The National Foundation for Credit Counseling has a list of these nonprofit agencies (Money Management International, for example). The NJ Department of Banking and Insurance licenses nonprofit credit counseling agencies.
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Unsafe, Recalled Autos
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CLNJ Opposed prior bill A4292 (Greenwald)/ S2740 (Beach)(2018)(Would have allowed car dealers to sell unsafe, recalled cars) If a manufacturer recalls a certain model car because of a safety defect, would you buy it for your child? No, of course not. Can a car dealer sell a car which is subject to a manufacturer’s recall? CLNJ says car dealers should fix recalled cars, not sell them to unsuspecting consumers.
Former Bill A4292 protected car dealers, allowing them to sell recalled cars to consumers with just a disclosure, not a fix for the mechanical problem. A4292 would also cut attorney fees for consumer attorneys who successfully prove that a car dealer has violated the N.J. Consumer Fraud Act.
Thankfully this bill did not become law.
Here is the CLNJ position paper:
The Consumers League of New Jersey strongly urges Governor Murphy to veto S 2740 (Beach) and A 4292 (Greenwald), special-interest legislation backed by unscrupulous auto dealers, should those bills (either singly or as companion measures) reach your desk.
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As the New Jersey State Bar Association has stated, those measures are “not really consumer protection bill[s]” and “should those measures become law, New Jersey consumers will be afforded less protection and little recourse when confronted with fraudulent business practices.”
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Those measures would eviscerate existing protections in New Jersey from unsafe, defective vehicles that are subject to either a safety or emissions recall, and also hamper the ability of individual victims and the Attorney General of our State to assert their rights in court, by capping attorneys fees at an unprecedented 30% of the amount of damages awarded, regarding any type of fraud committed by an auto dealer.
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These extreme measures, which are backed by unscrupulous auto dealers who seek to maximize their profits by knowingly and deliberately selling vehicles with dangerous safety or emissions recall defects, would drastically weaken the existing laws in New Jersey that currently protect the public from defective vehicles with known safety or emissions defects by holding auto dealers liable if they engage in false advertising or bait and switch; fail to comply with express and / or implied warranties; engage in unfair and deceptive acts and practices or fraud; fail to comply with the common law duty of care; or act with negligence, resulting in damage, injuries, or wrongful death.
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These bills would shift legal liability onto victims of unsafe vehicles, and give auto dealers a new, unprecedented "safe harbor" for knowingly and deliberately selling vehicles with lethal safety defects, if they merely “disclose” that a vehicle has an unrepaired safety or emissions recall. As car dealers themselves have stated publicly, they seek enactment of laws such as this in order to evade legal liability when such sales result in fatalities or injuries.
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These measures pose a serious threat to the safety of used car buyers, their families, other passengers, and others who share the roads, including bicyclists and pedestrians, and will result in increased deaths and injuries and illnesses due to motor vehicle safety or emissions defects.
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S 2740 / A 4292 are similar to other special-interest measures dealers have sought to get enacted in other states, that were either defeated or amended to remove the harmful provisions, including California, Virginia, and Maryland, and most recently, New York. Because they would make New Jersey’s laws weaker than the laws in other states, they would make New Jersey into a dumping ground for unsafe recalled cars.
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As polling conducted by Public Policy Polling in New Jersey found, likely voters overwhelmingly oppose allowing dealers to sell unrepaired recalled cars, with or without "disclosure,” with over 90% opposing such legislation.