This is a compilation of coverage of legislative efforts to update New York’s consumer protection law.
News and Events
Opinion: Delivering better consumer financial protection for New Yorkers
As President Donald Trump dismantles the U.S. Consumer Financial Protection Bureau, the former director of the CFPB says it’s up to states like New York to crack down on unfair business practices.
By Richard Cordray who served as the first director of the U.S. Consumer Financial Protection Bureau from 2012–2017.
March 28, 2025
New York urgently needs new legislation to “muscle up” its laws that protect consumers. Following the 2008 financial crisis which led to the Great Recession, Congress created the U.S. Consumer Financial Protection Bureau and gave it broad powers to combat “unfair, deceptive, or abusive” conduct. In the years since, the CFPB has clawed back and returned billions of dollars to customers from financial institutions that cheated them.
These widespread harms to consumers can take various forms. The CFPB’s first enforcement actions returned hundreds of millions of dollars to consumers who opened new credit card accounts and were charged useless “add-on” fees in the process of signing up for them.
Another notorious action exposed Wells Fargo for signing people up to fake bank accounts they had not requested, which padded the numbers for awarding bonuses to employees. In yet another major action, the CFPB joined 49 state attorneys general in ordering Ocwen Financial to repay $2 billion to homeowners for rampant legal violations in servicing their home mortgages. In many other cases, as in Ocwen, the CFPB has teamed up with New York and other states to get meaningful relief for those hurt by illegal and predatory practices.
But the Trump administration is now backing away. Elon Musk wants to “delete” the CFPB, and his minions are working to gravely weaken it, including by dropping major law enforcement actions against financial companies for harming consumers. And who are the consumers now at risk? They are our families, our friends, ourselves – everyone who uses basic consumer financial products like mortgages, credit cards, auto loans and student loans.
The gutting of protections at the federal level sounds the alarm for state officials who care about consumers and who can do more to protect them. A key piece of legislation to modernize New York’s core consumer protection laws is thankfully being advanced by state Attorney General Letitia James. The bill is the Fostering Affordability and Integrity through Reasonable (FAIR) Business Practices Act, and it will be sponsored by state Sen. Leroy Comrie and Assembly Member Micah Lasher, both of whom are ardent supporters and sponsors of consumer protection legislation.
How will this bill matter? Let’s step back for a moment and look at the bigger picture. Our American system of federalism provides for dual levels of responsive governments – one national authority and many state governments designed to be closer to the people – to better ensure liberty and security to each citizen.
For over two centuries, this system has proved durable and yet flexible enough to meet localized needs in different regions of our country. Authority has ebbed and flowed, especially when it comes to economic matters. Sometimes the federal government has stepped in with new programs and initiatives. More often, state and local leaders have paved the way for new expansion and development – be it by digging the Erie Canal or building the subway system for New York City.
Often these parallel layers reinforce one another, as they do in constructing a workable network of roads and rail transportation or in financing and administering our vast system of higher education. Federalism also allows state leaders to move forward even when the federal government retreats, as the Trump administration is now rapidly doing on consumer protection.
In fact, for most of our history, state and local governments served as the front line of protection against fraudulent and deceptive practices by financial institutions. In recent years, the states have continued their vital work alongside and in conjunction with federal officials. But with Musk’s aggressive new chokehold on the CFPB, state law enforcement authorities, including the New York attorney general’s office, are already moving to pick up the slack.
New York, however, is working with a law passed generations ago that – unlike many other state laws and their federal counterparts – only prohibits “deceptive” practices, but does not reach either “unfair” or “abusive” practices. As long as the cops were on the beat at the national level, this narrower approach was less consequential. But now that the feds are standing down, New Yorkers are exposed.
The markets for consumer products have become increasingly complex. Bad actors are using powerful new technologies and computer algorithms to fleece consumers in ways both large and small. By adding extra fees or complicated contract terms, often buried deep in the fine print, they can harm consumers using methods that go beyond merely tricking or deceiving them. A stronger response is needed to protect New Yorkers more effectively.
One thing we can count on is that the lawbreakers are endlessly creative and imaginative. New York needs the more robust tools provided in the proposed legislation to keep pace with these novel schemes. The federal government has identified the needed tools but now has lost its will. New York officials have the will and the know-how to protect consumers, but they need these better tools to do the job properly. The time is now for a strong push to pass the FAIR Business Practices Act as soon as possible.
Legislation Announced will Deter Bad Practices and Safeguard New Yorkers as Federal Watchdog Agencies are Undermined, Advocates Say
New York Attorney General Letitia James Announces the Fostering Affordability and Integrity Through Reasonable (FAIR) Business Practices Act
March 17, 2025--The Fair Deal NY coalition applauds Attorney General Letitia James for announcing a robust program bill--the FAIR Business Practices Act--that will vastly improve New York’s notoriously weak consumer protection statute. Co-championed by Senator Leroy Comrie and Assemblymember Micah Lasher, the FAIR Business Practices Act will ban unfair and abusive business practices, promote a healthy and competitive marketplace, and keep money in the pockets of hard-working families. The passage of this measure is especially critical to safeguard New Yorkers at a time when the Consumer and Financial Protection Bureau and Federal Trade Commission--charged with regulating business practices and protecting consumers nationally--are being stripped of their powers.
While most states and the federal government ban unfair, deceptive, abusive acts and practices, New York only bans deceptive practices. This leaves consumers – including seniors, student loan borrowers, homeowners, and others – without recourse when they are taken advantage of. Examples of practices that are unfair but not deceptive include:
A debt collector collects and refuses to return a senior’s social security benefits, knowing that they are exempt from collection.
A car dealer refuses to provide sales tax documents necessary to register the car unless the customer pays an additional, and unexplained, $1000.
Bank holds crime victim liable for unauthorized transaction despite possessing surveillance footage that proves the customer did not make the withdrawal.
Student loan servicer steers borrowers towards the most expensive repayment options.
“New York’s bedrock consumer protection law is intended to protect New Yorkers from new and evolving scams across all economic activity, but in practice it has fallen short, leaving gaps where scam victims have no recourse to get their money back, while making it profitable to continue abusing people,” explained Senior Staff Attorney Ariana Lindermayer of Mobilization for Justice. “The FAIR Business Practices Act will close these gaps and catch New York up with the 42 states with privately enforceable unfairness bans; honest businesses and everyday New Yorkers will welcome real protection from predatory businesses and competitors.”
“Updating New York’s weak consumer protection statute will level the playing field for companies who are treating their customers fairly,” said Empire Justice Center Policy and Communications Director Alex Dery Snider. “We thank the Attorney General, Senator Comrie, and Assemblymember Lasher for their work, and we encourage the Legislature to pass the FAIR Business Practices Act as soon as possible. New York consumers and small businesses deserve these basic protections.”
“The FAIR Business Practices Act includes several welcome improvements to the current law, including an increase in damages, authorization for state court statutory class actions, mandatory attorney’s fees, and the critical elimination of the court-created requirement that a single aggrieved person be able to show that a business’s bad acts affects the public at large,” said Carolyn Coffey, director of litigation for economic justice at Mobilization for Justice. “Other provisions in the proposal--including a cap on class action damages and a notice to cure--should serve to preempt arguments previously made by industry groups that are against amending the existing law and expanding access to justice for New Yorkers.”
“In a recent report, the Consumer Financial Protection Bureau urged states to strengthen state consumer protection laws,” said Winston Berkman-Breen, Legal Director with the Student Borrower Protection Center. “In the face of attempts to weaken the federal Consumer Financial Protection Bureau’s ability to protect consumers, this bold action by Attorney General James will help fill that consumer protection void in New York.”
“While New York has been a leader on a number of issues, it lags behind other states when it comes to protecting consumers from unfair business practices that are not considered outright deceptive,” said Chuck Bell, advocacy program director at Consumer Reports. “This leaves New Yorkers vulnerable since consumers can be harmed by unfair harassment by debt collectors, high-pressure sales tactics, and one-sided contract terms even when these practices are not necessarily deceptive. This bill brings New York’s law in line with the protections currently in place in most other states and will ensure that New Yorkers can be protected when they are treated unfairly.”
Background and Further Reading
The federal Consumer Financial Protection Bureau (CFPB), which was created in the wake of the 2008 financial crisis, is the primary watchdog protecting consumers from misconduct by banks, lenders, servicers, credit reporting agencies, debt collectors, and other financial services companies.
As of February 10, 2025, the Trump Administration has ordered the CFPB to cease all work and has closed its main headquarters in Washington DC.
In January 2025, the CFPB issued a report, Strengthening State-Level Consumer Protections, in which it proposed several of the components of the FAIR Business Practices Act.
In 2024, the CFPB received 181,899 complaints from New York consumers, up from 79,442 in 2023, a 129% increase.
As of February 19, 2025, there were 38 pending enforcement actions by the CFPB for violations of federal consumer protection laws, including for unfair, deceptive, or abusive acts or practices. As of March 4, 2025, the Trump Administration has dropped 8 of those cases with prejudice, which means the federal government can no longer pursue those claims against those companies. These cases included a bank that cheated customers out of billions of dollars in savings account interest, a student loan servicer that illegally collected loans that had been discharged in bankruptcy, and a lender who put borrowers purchasing manufactured homes into unaffordable loans.
According to the Federal Trade Commission, in 2024, New York ranked 14th in the country for the number of fraud and other reports made to government agencies per 100,000 residents, with a total of 278,662 for the year.
According to the National Consumer Law Center, which publishes a report on all 50 states’ and the District of Columbia’s consumer protection laws, New York’s law is “relatively toothless” in terms of its penalties’ ability to deter bad actors.
About Fair Deal NY
Fair Deal NY is a coalition of labor, legal services and other community-based organizations working together to end abusive and unfair business practices in New York.