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New York Attorney General Letitia James unveiled a new legislative proposal on Thursday aimed at safeguarding consumers and small businesses in the state from predatory practices by lenders, debt collectors, and healthcare companies.
According to a statement from James, this new legislation seeks to enhance the state’s consumer protection laws, which have been in place since 1970 but have limited provisions. This initiative is especially crucial as the federal Consumer Financial Protection Bureau (CFPB) has faced significant challenges under the Trump administration, hampering its ability to protect consumer rights effectively.
Dubbed the Fostering Affordability and Integrity through Reasonable Business Act (FAIR Business Practices Act), James noted that the bill has garnered support from state legislators, including Senator Leroy Comrie and Assemblymember Micah Lasher.
“Currently in New York, companies can make cancelling subscriptions incredibly difficult; nursing homeowners have the ability to sue relatives of deceased former residents; and debt collectors may unlawfully seize social security benefits,” James stated. “The FAIR Business Practices Act will address these issues by closing loopholes that enable scams and empowering my office to take action against lawbreakers.”
This legislative proposal is among the first efforts by state officials to fill the regulatory gap that has emerged due to the CFPB’s weakened status. Following his recent appointment, Acting CFPB Director Russell Vought has reportedly laid off approximately 200 staff members and halted most operations at the agency. Efforts to downsize the bureau have sparked considerable concern, particularly as a federal judge has intervened to prevent mass layoffs.
Many are left wondering about the future of the CFPB, but as long as the agency’s functionality remains stalled, consumers may have to rely on state attorneys general and regulatory bodies to address their grievances.
In detailing the protections offered by this proposed law, James emphasized that it would prevent auto lenders, as well as mortgage and student loan servicers, from directing consumers towards high-interest loans. Additionally, the legislation aims to minimize unnecessary fees, curb unscrupulous practices at car dealerships, and protect non-English speakers from exploitation.
The initiative has received backing from notable figures within the previous Biden administration, including former CFPB Director Rohit Chopra and former Federal Trade Commission Chair Lina Khan. Chopra remarked, “There is a critical need for stronger state laws to address abuses that affect families and honest businesses.” Khan added, “By enacting meaningful consumer protection legislation, New York’s lawmakers can empower Attorney General James to robustly defend the financial stability, privacy, and economic rights of New Yorkers.”
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