New York Broadens Attorney General Authority and Embraces Enforcement-Driven Regulation

New York has amended its General Business Law to move beyond a deception-based consumer protection standard and authorize enforcement against unfair and abusive practices, giving the Attorney General materially broader discretion to shape marketplace conduct. The new framework resembles federal UDAAP enforcement in that it relies less on detailed statutory rules and more on evolving enforcement judgments about what constitutes "fair" conduct.

In announcing the amendments to New York GBL § 349 contained in the Fostering Affordability and Integrity through Reasonable (FAIR) Business Practices Act, Attorney General Letitia James pointed to lending and debt collection practices, fee structures, billing mechanics that complicate understanding, contract terms viewed as exploitative, student loan servicers, car dealers, nursing homes, health insurance companies, and impacts on vulnerable or limited-English-proficient consumers. The statute also expressly recognizes potential harm to small businesses and nonprofits, extending potential exposure beyond traditional consumer relationships.

A Broader, Discretion-Driven Standard

Unfair, abusive, and deceptive practices are now prohibited. Unfairness tracks an FTC-style balancing test; abusiveness focuses on interference with understanding or taking unreasonable advantage of vulnerabilities or reliance similar to the federal Consumer Financial Protection Act; deception remains guided by longstanding § 349 concepts. Practically, this framework shifts significant interpretive authority to the Attorney General, meaning companies will need to manage not only written rules, but also evolving enforcement expectations.

Enforcement Authority and Remedies

The Attorney General may seek injunctive relief, restitution, and civil penalties, and will argue that it can use the statute against out-of-state entities whose conduct affects New Yorks (an argument the AG routinely makes in investigations and lawsuits under existing New York law). Prior judicial limits requiring "consumer-oriented" conduct have been loosened, increasing prosecutorial flexibility. This is likely to translate into broader investigative activity and, in some sectors, more proactive regulatory scrutiny, including of business-to-business commercial activity. Taken together, these expanded remedies and enforcement tools signal a deliberate shift away from rule-based oversight and toward greater reliance on enforcement discretion to shape marketplace conduct.

Embrace of Regulation Through Enforcement

The FAIR Business Practices Act's passage comes on the heels of former CFPB Director Rohit Chopra assuming an advisory role to a coalition of Democratic attorneys general focused on coordinated consumer protection initiatives, including efforts to fill perceived gaps left by federal regulators. The development underscores an increasingly nationalized approach to state enforcement policy, in which shared strategies and shared priorities may drive investigatory and litigation decisions across jurisdictions.

Because the Act applies broadly to ordinary commercial conduct across the economy, it should be understood less as a technical update to consumer law and more as part of a wider shift toward discretionary, policy-driven enforcement. For businesses of all sizes, the practical risk is not simply compliance with clearly defined rules, but exposure to evolving judgments about "fairness" and "abuse" that are shaped through enforcement rather than through transparent, prospective regulation.

Pre-Notice Requirement

Before initiating an action under this provision, the Attorney General generally must provide advance notice by certified mail and allow five business days for a written response explaining why the action should not proceed. This pre-notice requirement may be bypassed where the Attorney General seeks preliminary relief and determines that notice would not be in the public interest.

No Private Right of Action

The Legislature declined to extend enforcement to private plaintiffs. Only the Attorney General may pursue unfair and abusive conduct; private claims remain limited to traditional deception under § 349. Earlier drafts would have created expansive private litigation exposure; the enacted amendments intentionally centralize discretion with a single enforcement office.