State officials in New York are pushing for broader consumer protections against harmful business practices, responding to recent federal constraints imposed by the Trump administration on consumer advocacy efforts.

The proposed legislation, named the “Fostering Affordability and Integrity through Reasonable Business Practices Act,” aims to strengthen New York’s consumer protection laws to prevent predatory practices. It is backed by state Attorney General Letitia James, Assemblyman Micah Lasher, several other lawmakers, and various civil rights groups.

Key Goals of the Proposed Legislation:

  • Target and penalize scams involving artificial intelligence.
  • Regulate subscription services that are difficult for consumers to cancel.
  • Eliminate misleading “junk” fees.
  • Prohibit unfair billing practices in healthcare.
  • Prevent lending companies from deceptively guiding consumers toward higher-cost loans.
  • Enhance protections specifically for non-English speaking New Yorkers.

The bill would empower both the attorney general’s office and individual consumers to file civil suits and seek penalties against businesses accused of unfair practices.

Specific Practices Addressed:

  • Car dealerships withholding a customer’s photo ID until a transaction is completed.
  • Unauthorized additional warranty charges.
  • Nursing homes suing relatives of deceased residents for outstanding bills.
  • Debt collectors withholding Social Security benefits.

Currently, New York prohibits only “deceptive” practices, making it one of just three states without explicit prohibitions against “unfair” or “abusive” business acts. This bill aims to rectify that by expanding the definitions and consequences of punishable business practices.

Rationale Behind the Bill:

Supporters argue this legislation fills a critical void created by recent federal actions targeting the Consumer Financial Protection Bureau (CFPB). The Trump administration, influenced by Tesla and SpaceX founder Elon Musk, significantly reduced the bureau’s capacity as part of a broader governmental downsizing effort:

  • Approximately 200 CFPB employees were laid off, with additional cuts planned.
  • A lawsuit by the CFPB employees union temporarily halted further layoffs.
  • Despite ongoing legal battles, CFPB continues its operations amid uncertainty.

The CFPB, established after the 2008 financial crisis, serves to enforce consumer financial laws and handle consumer complaints. The weakening of this federal agency underscores the importance of stronger state-level consumer protections.

Attorney General James emphasized the need for robust state action:

“We cannot allow bad actors to cheat, deceive, and scam working New Yorkers. The Fair Business Practices Act would empower this office and affected individuals to act decisively against unfair, deceptive, and abusive tactics.”

The legislation awaits formal introduction in the state legislature.