Press
Highlights
Crain’s New York Business
Mamdani-backed bill would expand who can sue NY businesses for unfair practices
By Kathryn Brenzel
October 8, 2026 — In its fight to ramp up consumer protections, the Mamdani administration is calling in reinforcements.
That backup could take the form of tenant unions, small businesses, nonprofits and others, who would gain more authority to sue businesses over unfair or abusive practices under a new City Council bill.
The administration is backing the People and Organizations Winning Economic Relief, or Power, Act, which would allow individuals, nonprofits and others to file lawsuits alleging unfair and abusive business practices. State law solely allows the state attorney general to file such lawsuits, while individual consumers can only pursue claims related to deceptive acts or practices.
The bill, to be introduced today by Councilman Harvey Epstein on behalf of Mayor Zohran Mamdani, would bring the city in line with other states’ “unfair, deceptive and abusive acts or practice,” or UDAAP, laws. It also builds on previous efforts by state lawmakers to similarly expand New York’s consumer protection regulations.
Carolyn Carter, a senior attorney with the National Consumer Law Center and author of a 2018 report detailing the differences between state UDAAP laws, said New York is an outlier in only allowing its attorney general to bring claims of unfair and abusive practices. She noted that New York is also one of only six states that requires individuals to prove that others have similarly been cheated by a company. The Power Act seeks to address both.
Efforts by state legislators, which ultimately took a different route than the city bill, faced pushback from business groups, who have already started sounding the alarm on the Power Act. The measure also joins a fierce debate over how to best rein in the risks posed by artificial intelligence.
Steven Fulop, CEO for the Partnership for New York City, said the threat of more expensive litigation against businesses in New York is likely to drive them to other cities.
“It’s just another reason why people would come to the conclusion that elsewhere is better,” he said.
He also questioned whether the city has the authority to create such rules, given existing state law. However, proponents are confident that New York’s Home Rule Law gives the city broad ability to tailor its statutes regarding unfair and deceptive practices.
Harm versus fraud
Proponents see the Power Act as a supplement to city and state enforcement against bad-behaving businesses, enabling cases that fall outside government bandwidth.
The bill could empower tenant unions to sue their landlord over withheld security deposits, for example, or students to take absentee loan servicers to court, without needing Attorney General Letitia James’ office to take up their cases.
“Public enforcement is never intended to cover the whole landscape,” said Winston Berkman-Breen, legal director at Protect Borrowers. “She can’t be every person’s lawyer.”
The issue is a “long-standing passion” for Sam Levine, commissioner of the city Department of Consumer and Worker Protection. Levine, a former official with the Federal Trade Commission, said he quickly got to work on the measure after joining the Mamdani administration.
Levine said the measure targets cases where people are being harmed by a company’s actions but aren’t necessarily being lied to. He described a hypothetical where someone is desperate to rehabilitate their mortgage, but their loan servicer never answers the phone.
A draft of the bill, provided to Crain’s on Wednesday, bases the definition of unfair and abusive on federal regulations. An “abusive act or practice,” includes taking “unreasonable advantage” of someone’s inability to understand risks or costs or to protect their interests. “Unfair” includes actions that cause or are “likely to cause substantial injury to consumers which is not reasonably avoidable.”
The bill touches on a number of priorities for the mayor. In an announcement about the bill this week, first reported by the New York Times, the administration emphasized tenant union actions. The mayor has pledged to help build up tenant unions, as well as create a path to legally recognizing such groups.
Levine believes AI will also be a major focus of the Power Act.
“I think as more and more companies integrate AI, especially into their pricing strategy, wage-setting strategy, you are going to see a lot more frustration by consumers,” he said. “This actually gives people a way to fight back against these stealth price hikes and stealth wage cuts.”
AG power
Last year state lawmakers approved the Fostering Affordability and Integrity through Reasonable, or FAIR, Business Practices Act. The law, which went into effect in February, authorized the attorney general to bring cases alleging unfair, abusive and deceptive practices. The state measure, however, didn’t alter private rights of action. That meant lawsuits brought by individuals were still limited to filing deception- related complaints.
State lawmakers previously considered separate legislation to allow individuals to bring lawsuits against businesses based on unfair and abusive acts, but that was supplanted by the FAIR Act.
The state attorney general’s office has already pursued a few cases under the FAIR Act, including a lawsuit accusing Amazon of overcharging its advertisers. A representative for James declined to comment on the Power Act.
The city measure already faces criticism from business groups, who expect a deluge of lawsuits to discourage investment in the city.
“New York City’s economic future depends on attracting investment, growing businesses and creating jobs,” Jim Whelan, president of the Real Estate Board of New York, said in a statement. “This appears to be another example of the Mamdani administration pursuing policies that send the opposite message.”
Sam Auld, a partner at the law firm Skadden, Arps, Slate, Meagher & Flom, said the law could face a state law preemption challenge, though such cases are more challenging if city legislation simply goes further than state law, rather than conflicting with it directly. He said the bill does, however, raise questions around whether tenant unions will be subject to conflict resolution agreements that individual tenants sign as part of their leases.
Speaker Julie Menin, who served as commissioner of the Department of Consumer Affairs under Mayor Bill de Blasio, hasn’t taken a public position on the Power Act but indicated that she looks forward to reviewing the bill. The bill’s sponsor, Epstein, said the issue was a top priority for him when he joined the council in December. He dismissed concerns that the measure would lead to businesses fleeing the city.
“This is just saying that people should not be cheated,” he said in an interview. “If people are not violating the law, they have nothing to worry about.”
The measure is another example of how former Biden-administration officials are helping to shape the mayor’s consumer protection agenda.
In her final days as chair of the Federal Trade Commission, Lina Khan sent a letter to the governor, City & State reported at the time. Khan is now the chair of the city’s Economic Development Corp.
When he was a director of the Consumer Protections Bureau, Levine sent a similar letter to Gov. Kathy Hochul about the importance of cracking down on “unfair and abusive” business practices.
He said his door is open to Wall Street and others who may take issue with the bill, but said they do not have veto power.
“I want all businesses to thrive,” he said. “I also don’t want a business landscape where working people can’t vindicate their rights.”
The New York Times
Mamdani Backs Bill to Let Consumers Sue Over Unfair Business Practices
The proposed New York City legislation would also allow nonprofits, including tenants’ unions, to sue companies directly rather than relying on agency enforcement.
By Dana Rubinstein
October 6, 2026 — A real estate company unfairly withholds tenants’ security deposit. A bank issues a loan to a struggling taxi driver who is likely to default. In New York City, both the tenants and the driver have limited recourse.
In a bid to put more power into consumers’ hands, Mayor Zohran Mamdani is expected on Thursday to introduce legislation in the City Council — via Harvey Epstein, a Democratic councilman from Manhattan and the bill’s sponsor — that would give individuals a “private right of action,” or the right to file civil lawsuits against companies on the basis of unfair and abusive business practices.
“Our administration will not sit back while New Yorkers are taken advantage of,” Mr. Mamdani said in a statement.
The bill, called the Power Act, is Mr. Mamdani’s first major piece of legislation in the City Council. It evokes the economic populism of Lina Khan, an adviser to the mayor who formerly ran the Federal Trade Commission. In 2024, Samuel Levine, then Ms. Khan’s deputy, urged the state to enshrine a private right of action for unfair practices in an expansion of its consumer protection law. Ms. Khan publicly backed the expansion the next year. (That right was ultimately excised from the legislation after industry lobbying.)
As the mayor’s commissioner of the Department of Consumer and Worker Protection, Mr. Levine is now trying again. Consumer advocates are hailing the proposal as a potentially transformative expansion of consumer rights at the municipal level, while industry representatives are warning that the bill could entangle businesses in endless litigation.
“You can see the floodgates opening for consumer class action litigation — plaintiffs’ lawyers champing at the bit,” said Preetha Chakrabarti, a partner at Crowell & Moring.
A spokesman for Julie Menin, the City Council speaker and the former consumer affairs commissioner, said Ms. Menin “looks forward to reviewing this bill as it moves through the legislative process.”
Under current New York law, individuals can sue corporations for deceptive business practices, but not for those defined as abusive or unfair. The state accords that right only to the attorney general’s office. (City law allows the Department of Consumer and Worker Protection to take action against companies by invoking a related concept known as “unconscionability.”)
The proposed legislation defines an abusive act as one that interferes with a consumer’s ability to “understand a term or condition of a good or service,” or takes “unreasonable advantage” of that lack of understanding. It defines an unfair act as one that is likely to harm consumers but “is not reasonably avoidable by consumers.”
In an interview, Mr. Levine explained the legal notion of “unfairness” by offering an example involving elder fraud, a phenomenon that the AARP says cost New Yorkers $408 million last year.
Say a scammer uses voice-cloning software to impersonate an elderly person’s daughter in an effort to extract cash. Under current state law, the victim could probably sue the scammer for deception, Mr. Levine said, but would not be able to sue “the company that made this voice cloning tool available to anyone.”
Including the “unfairness” standard in the law means “you can actually say, ‘You are putting out a harmful product into the world that is facilitating fraud,’” Mr. Levine said, adding: “Deception is ‘you lied to me.’ Unfairness is ‘you engaged in conduct that harmed me.’”
Mr. Levine listed other experiences that might engender civil litigation under the proposed law: drugstore patrons who are inaccurately tagged as shoplifters by faulty facial recognition systems; bodega owners who are charged higher soda wholesale rates than chain stores; freelance artists who share their work on an online platform, only to find that the platform is using that work to train artificial intelligence.
The federal government has banned unfair and deceptive corporate practices since 1938. Since then, states and municipalities have developed their own laws, with varying degrees of breadth. New York’s law, even with its 2025 expansion, is viewed by consumer advocates as unnecessarily narrow, because of its omission of a private right of action for consumers.
The mayor’s and Mr. Epstein’s proposed legislation would also grant the private right of action to nonprofits, which would enable tenant unions, whose growth the Mamdani administration has encouraged, to take action in court.
“If the same landlord is withholding the security deposit of a bunch of tenants in the same building, those tenants could sue collectively — assert the practice is unfair or deceptive,” Mr. Levine said.
That clause allowing nonprofits, including tenant unions, to sue offers a potential workaround to the arbitration clauses that consumers often unknowingly agree to when they sign up for services.
“I’ve never heard of another municipality doing anything like this, to this extent,” said Diane Thompson, deputy director of the National Consumer Law Center.
Mr. Levine believes the legislation will help rein in corporate misconduct during a time of federal “under-deterrence of white-collar crime,” and in an environment where law enforcement agencies’ bandwidth is inherently limited.
“These are not new standards, and the people to whom they are being applied are not new,” said Winston Berkman-Breen, legal director at Protect Borrowers, a consumer advocacy group. “But no one at the federal level is enforcing these laws, so there’s an accountability gap that New York City would fill by empowering local people to enforce protections on their behalf.”
The bill’s detractors — including those who have regularly faced off against city regulators — argue that New York City would essentially be outsourcing enforcement “to thousands of billboard lawyers who would define the rules lawsuit by lawsuit,” as Josh Gold, a spokesman for Uber, put it.
Mr. Levine countered: “We can never sue every company that’s harming the public. There’s just not enough capacity to do that. And what that means is that companies, I think, do sometimes feel a sense of impunity.”
Syracuse Post Standard
Opinion: NY must step up to protect consumers as feds step back
By Samuel Levine & Seth Frotman
Sam Levine is former director of the Federal Trade Commission’s Bureau of Consumer Protection. Seth Frotman is former general counsel and senior adviser to the director of the Consumer Financial Protection Bureau. They are based in Washington, D.C.
May 29, 2025 — It will come as no surprise to Syracuse that the global financial crisis did not begin with the collapse of Lehman Brothers, or with the meltdown in the stock market. It began house by house, mortgage by subprime mortgage, pushed by lenders who knew these loans would fail. And it began with the federal government turning a blind eye to this slow-motion crisis, actively encouraging subprime lending until it was too late.
We do not know if another crash is coming, but the warning signs are there. And instead of strengthening the guardrails, the Trump administration is taking a wrecking ball to them. The Consumer Financial Protection Bureau — created after the last crash to stop predatory lending before it spirals out of control — is under siege. The federal government is rolling back enforcement, defunding key agencies and making it easier for corporate giants to scam consumers.
Fortunately, states have their own consumer protection authorities, and it is critical they step up to protect their citizens. New York should be leading this effort, but it is missing a key weapon in its arsenal — a prohibition on practices that are unfair or abusive. To understand the importance of these tools, a brief history is in order.
In 1938, amid widespread concern about unscrupulous business practices, Congress passed legislation prohibiting unfair or deceptive conduct. Recognizing that bad actors are constantly finding new ways to cheat consumers, Congress made this law intentionally broad. The unfairness prong, as it was later understood, prohibited practices that caused unavoidable injury to consumers, while the deceptive prong prohibited practices that mislead. Over time, many states adopted similar tools, and often enforced them with more vigor than their federal counterparts. In 2007, for example, Massachusetts used its unfairness authority to challenge a subprime lender whose loans were designed to fail, successfully halting thousands of foreclosures. And it’s not only predatory financial practices that states can target with this tool. In recent years, states have sued Meta and TikTok for hooking young users on their platforms, an approach modeled on states’ successful efforts to stop the unfair marketing of cigarettes to teens in the 1990s.
Unlike the vast majority of states, however, New York does not prohibit unfair practices. Nor does New York prohibit abusive practices. The absence of these protections deprives New York of a critical tool and exposes its citizens to serious harm. But the good news is that state lawmakers are currently weighing a proposal, the FAIR Business Practices Act, to amend the state’s consumer protection statute to prohibit unfair and abusive practices. Passing this legislation should be an urgent priority.
Some may argue that New Yorkers don’t need these safeguards, but the CFPB has already received more than four times as many complaints from Syracuse this year compared to this time last year. Clearly action is needed.
We have spent our careers enforcing these tools across different agencies, most recently as leaders of the FTC and CFPB. Over the last four years, our agencies deployed these tools to crack down on pharmacy middlemen inflating insulin costs, to stop data brokers from surreptitiously tracking our movements, to make subscriptions easier to cancel, to return billions to victims of junk fees and to shut down predatory financial products. Had our agencies been limited to prosecuting only deceptive conduct, we would not have been able to deliver these wins for the public.
Unfortunately, New Yorkers can no longer count on vigorous federal enforcement. But the state is fortunate to have strong consumer protection leaders of its own. Syracuse state Sen. Rachel May serves as Chair of the Senate Consumer Protection Committee and has championed this legislation. And Attorney General Letitia James — one of the most effective attorneys general in America — has spoken out forcefully about the need to reform the state’s antiquated consumer protection statutes. We agree with May and James.
It is urgent that the legislature fix these gaps in New York law and help ensure that New Yorkers don’t pay the price for federal fecklessness.
City & State NY
Lina Khan asks NY to outlaw unfair business practices
The outgoing FTC chair wrote a letter to state leaders encouraging them to pass a new law banning “unfair and abusive” business practices.
January 23, 2025 | By Rebecca C. Lewis — In one of her last acts as the chair of the Federal Trade Commission, Lina Khan penned a letter to Gov. Kathy Hochul and legislative leaders urging them to outlaw “unfair and abusive” business practices in the wake of the Trump administration.
In a letter dated Jan. 19 – one day before President Donald Trump’s inauguration – Khan applauded recent actions by the state to increase consumer protections. But she warned about uncertainty in the field with the new administration, expressing the need for the state to pass a new law. “Given potential changes in how federal enforcers approach consumer protection in the coming years, equipping state enforcers with this additional authority is especially critical,” Khan wrote.
Hochul included a measure to ban unfair and abusive business practices in her budget last year, which would build on the state’s existing laws against deceptive practices. State lawmakers have also introduced the Consumer and Small Business Protection Act, which is slightly broader and permits class action lawsuits against businesses that engage in unfair, abusive or deceptive practices. The budget measure ultimately did not make it into the final version of last year’s state budget, and the Consumer and Small Business Protection Act has not passed yet.
The bill, which lawmakers reintroduced this year, would adopt the “unfairness authority” that the FTC has at the federal level, which Khan wrote in her letter is critical. “The flexibility that unfairness authority affords has been crucial to the Commission’s efforts to protect the American people in an ever-evolving economy over almost a century,” she wrote. Khan credited it in particular with FTC action to protect consumers from unscrupulous tech practices employed by businesses, such as Rite Aid’s use of artificial intelligence-based face recognition that often misidentified shoplifters.
In her letter, Khan also referenced an issue close to the governor’s heart: child online safety. Hochul has lauded landmark laws approved last year meant to protect children’s privacy online and restrict the use of algorithmic feeds when minors use social media. Khan wrote that the unfairness authority is “integral to protecting children and teens online,” citing a recent case where the FTC punished a company for promoting anonymous messaging apps to children.
This is at least the second such letter that the FTC has sent to Hochul and leaders. Last February, the then-heads of the commission’s Bureau of Consumer Protection and Office of Policy Planning wrote a similar letter as state leaders considered including consumer protections in last year’s budget.
Khan was one of President Joe Biden’s most controversial nominees; as FTC chair, she aggressively challenged proposed mergers and launched investigations into the business practices of large tech companies like Amazon and Microsoft. Her novel interpretation of antitrust law endeared her to progressives while infuriating pro-business conservatives. On Monday, Trump named a new FTC chair to replace Khan, and Khan subsequently announced that she planned to resign from the commission in the coming weeks.
City & State NY
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, 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.
Times Union
Commentary: New York must do more to protect small businesses from predatory loans
The FAIR Business Practices Act would ban deceptive, unfair and abusive practices, including deceptive or opaque interest rates.
By Eda Henries, founder and managing principal of Henries & Co.
January 23, 2025 — Since the federal Truth in Lending Act doesn’t extend protections for small businesses seeking commercial loans, a handful of states, including New York, have stepped up to help small-business borrowers by requiring certain disclosures. The problem is that New York law does not go far enough.
New York does not prohibit loans containing unfair or abusive terms, and courts have excluded these lending businesses from the existing general prohibition against deceptive practices. These seemingly small omissions are a big problem for small businesses.
I operate a financial advisory firm, and although I work with highly successful small businesses, nearly every one of my clients has had some experience with predatory lenders. This happens because traditional banks have largely exited the small-business lending area, leading to a riskier capital landscape.
When a small-business owner needs a loan today, they often start with a Google search and immediately come across nontraditional lenders that can offer quick cash. But the flip side of that is these loans typically come with very high interest rates and confusing fees that leave a borrower worse off than before. What may look like growth funding or growth capital ends up being a debt trap.
Lenders that prey on small businesses skirt traditional regulations to trap entrepreneurs into a debt cycle. The predatory collections practice, paired with enormous payment requirements and unclear contracts, can result in a loan of less than $200,000 leading to payments of $1,000 per day.
Sometimes, the consequence of a predatory loan is not just the disruption or even closure of a small business. It can also mean personal bankruptcy because many small business owners are tricked or pressured into personally guaranteeing their business loans. Bankruptcy resulting from a predatory loan is not the American Dream.
The situation cries out for federal action: Congress should extend Truth in Lending Act protections to cover commercial loans. But with that action unlikely, and with the Trump administration deemphasizing financial regulation, as evidenced by its gutting of the Consumer Financial Protection Bureau, states like New York must step up and fill in the gaps.
That’s why I urge our state lawmakers to pass state Attorney General Letitia James’ FAIR Business Practices Act, which would ban deceptive, unfair and abusive practices that harm small businesses, including deceptive or opaque interest rates.
New York has taken some strides when it comes to protecting small businesses from predatory loans, but the work is not yet complete. If the state is truly committed to supporting small businesses, it cannot allow bad actors in the lending space to act without guardrails or in abusive, unfair ways. To help our small-business community, New York must protect it from deceptive, unfair and abusive practices by unscrupulous lenders, vendors and other predatory businesses.