New York AG unveils new consumer protection bill

NEW YORK — New York Attorney General Letitia James Thursday unveiled proposed state legislation — backed by top former federal consumer protections officials — to strengthen the empire state’s consumer protection standards to counter what she characterized as a regression of such protections at the federal level. 

“In recent weeks, the federal government has taken steps to destroy regulatory offices,” said James at a press conference in New York. “This law would ensure that regardless of who is in Washington, New York can always protect vulnerable consumers.”

The Fostering Affordability and Integrity through Reasonable Business Practices Act, also known as the FAIR Act, would update the state’s general business law to prohibit unfair and abusive business practices in addition to existing bans on deceptive tactics. James said the bill empowers the attorney general and affected individuals to take legal action against bad actors, allowing the state to seek civil penalties and restitution for consumers and small businesses harmed by predatory lenders, fraudulent debt collectors, exploitative subscription services and other deceptive schemes.

Under the Trump administration, the Consumer Financial Protection Bureau has undergone significant policy rollbacks and staff reductions as part of a broader strategy led by the Department of Government Efficiency — putatively led by White House advisor and billionaire entrepreneur Elon Musk — to downsize federal agencies. 

Since Trump’s appointment of acting CFPB Director Russell Vought in early February, the agency has initiated major layoffs, aiming to reduce the CFPB’s workforce by over a thousand employees. The administration also pulled back lawsuits against financial companies and banks and slashed regulations, raising concerns from critics about the CFPB’s capacity to effectively safeguard consumers. The Trump administration’s efforts have been met with a number of lawsuits. James’ office filed an amicus brief alongside other state attorneys general supporting a suit by the City of Baltimore opposing the Trump administration’s efforts to downsize and halt work at the CFPB.

The New York legislation — introduced by New York Senator Leroy Comrie and Assemblymember Micah Lasher — was portrayed as a response to what its supporters describe as inadequate consumer protections at the state level and weakening federal enforcement under the current administration. Former Federal Trade Commission Chair Lina Khan and former CFPB Director Rohit Chopra joined AG James and state legislators in a press conference announcing the bill Thursday.

“Deep blue New York has one of the weakest consumer protection laws in the country. We are just one of three states that does not ban unfair business practices,” said Lasher. “Donald Trump, who ran on the issue of affordability, is turning the lights off at the very federal agencies responsible for protecting our pocketbooks. The news today is that New York is fighting back.”

It would empower the attorney general’s office and affect consumers to seek civil penalties and restitution from businesses engaging in harmful practices. Emphasizing the urgency of closing legal loopholes, James said that “at a time when the federal government is making life harder, we want to make life easier for New Yorkers.”

Khan argued that strengthening New York’s consumer protection laws is particularly important because federal regulators have a history of failing to act against corporate misconduct. She pointed to past financial crises, like the subprime mortgage collapse, where federal agencies ignored predatory behavior while state enforcers took action.

“It was actually some state enforcers that were sounding the alarm and trying to protect their citizens,” she said. “Even when federal enforcers aren’t totally [missing in action] sometimes they don’t have the same priorities, and sometimes they don’t even have the full ability to get back money for consumers or issue penalties and fines, so really strengthening the ability of state to take vigorous action when companies are preying on or appeasing American consumers is just absolutely vital.”

Chopra said the proposed legislation aims to make New York a leader in consumer protection — a prospect that will benefit both consumers and businesses. He argued that fair practices foster trust and create a stronger business environment.

“What we want to do is to make sure … that people feel the businesses that they are working with are wanting to give them good service at a good price,” Chopra said. “We want businesses to succeed that are doing great things in their communities and in our country and it is absolutely wrong to make them compete with those who spend their time innovating on how to cheat people, innovating on how to make it impossible to cancel a subscription, innovating on how to design a product with fees that you cannot tell what they are until it is too late.”