With the Consumer Financial Protection Bureau (CFPB) in disarray and grants being slashed at the federal level, street-level initiatives to curb corporate malpractice appear to be endangered. New York Attorney General Letitia James is looking to turn the tide with new legislation introduced on March 13.
The Fostering Affordability and Integrity through Reasonable (FAIR) Business Practices Act, supported by New York Sen. Leroy Comrie (D-14) and Assembly Member Micah Lasher (D-69), aims to strengthen consumer protection laws in New York. It targets various scams, including deed theft and online phishing, and addresses issues like hidden fees and unfair billing by healthcare companies.
The law also empowers the attorney general and victims to seek penalties against businesses that exploit vulnerable New Yorkers, particularly with limited English proficiency.
“At a time when the federal government is making life harder, we want to make life easier for New Yorkers,” James said in a press release. “The FAIR Business Practices Act will close loopholes that make it too easy for New Yorkers to be scammed, and will allow my office to go after anyone who violates the law and look forward to working with my partners in state government to ensure that as Washington retreats from protecting consumers, New York steps up to lead.”
New York’s current consumer protection law, GBL §349, was passed in 1970 and only targets outright deceptive business acts and practices. If passed into law, the FAIR Business Practices Act would protect New Yorkers more broadly from unfair and abusive business acts, such as:
- Companies that make it difficult for consumers to cancel a subscription
- Student loan servicers that steer borrowers into the most expensive repayment plans
- Companies that take advantage of consumers with limited English proficiency and obscure pricing information and fees
- Debt collectors that collect and refuse to return a senior’s Social Security benefits, even though they are exempt from debt collection
Supporters of the FAIR act include former Federal Trade Commission (FTC) Chair Lina Khan and former CFPB Director and FTC Commissioner Rohit Chopra, who highlight the pressing current need for rigid consumer protections at the state, if not federal, level.
“Strong consumer protection tools are essential for protecting Americans from unfair and abusive business practices,” Khan said in a release. “At the FTC, we used these tools to tackle a range of exploitative tactics, from outrageous subscription traps and predatory scams to dangerous commercial surveillance. By passing a strong consumer protection bill, New York lawmakers can empower Attorney General James to fully defend New Yorkers' pocketbooks, privacy, and economic freedoms.”
“Businesses should compete by providing great products and superior service, not by devising schemes to rip people off,” Chopra said in a release. “We need stronger state laws to combat abuses that harm families and honest businesses. With stronger laws on the books, Attorney General James and state law enforcement across the country can stop the scourge of junk fees and other crimes against consumers.”
Comrie said he was proud to work with James and Lasher to put power back in the hands of the public and bring New York back in line with the standard set by other states with similar consumer protections.
“When unscrupulous actors take advantage of New Yorkers through online scams, junk fees, and hidden costs, our community and our economy suffer,” Comrie said in a release. “From unfair debt collection to deed theft, too many consumers have been hurt by abusive and deceptive practices.”
“Consumer protection equals affordability,” Lasher added in a release. “Every year, billions of hard-earned dollars are extracted from American consumers by companies, big and small, that take advantage of us.”
James and her supporters point to the chaos among federal watchdog agencies like the CFPB to demonstrate the urgency of the FAIR act. On Feb. 9, the Trump administration ordered CFPB staff to stop all work protecting consumers and decline any new cases. As a result, the nation's largest banks are no longer being closely watched for compliance with key consumer protections by any federal regulator.
“New York once stood as a model of consumer protection, but over time has fallen behind most other states in this regard,” Carolyn Carter, deputy director of the National Consumer Law Center, said in a release. “New Yorkers are especially vulnerable in this moment as our strongest line of defense – the CFPB and FTC – are being eroded, and there are no state-level protections in New York against unfair and abusive market conduct.”