Enacts the "fostering affordability and integrity through reasonable (FAIR) business practices act"

• Democratic73

◆ The sponsor's argument

Why Leroy Comrie says this is needed

The "Fostering Affordability and Integrity through Reasonable (FAIR) business practices act" ("the FAIR Business Practices Act") updates the Attorney General's powers to enforce New York's consumer protection laws by adding federal authorities that are presently at risk of falling into desuetude. The bill brings the Attorney General's consumer protection authority into line with now-47 states that outlaw unfair business practices, updates enforcement mechanisms not touched since 1980, and closes a court-created loophole inadvertently and inappropriately applied to Attorney General enforcement actions and proceedings. It also augments the Attorney General's powers to protect consumers and businesses in the wake of the federal government's attempted dismantle- ment the Consumer Financial Protection Bureau (CFPN, protected New York- ers from abusive acts perpetrated by businesses. Although this memo uses the word "businesses" to describe defendants or potential defendants in FAIR Business Practices Act enforcements and litigations and "business practices" to describe the acts and practices of those persons, the acts and practices of non-profit entities are covered by the Act, and nonprofits are protected to the same extent as businesses are by any of the Act's protections or defenses. OUTLAWING ABUSIVE AND UNFAIR ACTS AND PRACTICES.ct. According to the National Consumer Law Center, 47 states other than New York already outlaw "unfair" business practices; many have done so since 1967. The FAIR Business Practices Act defines "unfair" practices using the Federal Trade Commission's definition, updated to cover businesses and non-profits as well as consumers (15 USC § 45(n)). This definition is narrower than most states' definitions of "unfair" acts and practices and is designed to be easy to comply with because it already applies to everyone under federal law. The Act applies to harms against businesses or non-profits as well as consumers, although it keeps the requirement that the benefits proposed to outweigh such harms must be to consumers or competition. By defining unfair acts and practices as extending to injury to more than just "consumers," the FAIR Business Practices Act does not observe the distinction found in the FTCA between "unfair competition" and "unfair acts and practices" (cf. Cel-Tech Commc'ns, Inc. v Los Angeles Cellular Tel. Co., 20 Cal 4th 163, 179-81 (1999)). The omission of "unfair competition" in the FAIR Business Practices Act should not be interpret- ed to exclude by negative implication acts and practices that constitute unfair competition. Nor does the fact that an act was found to be an unfair method of competition (or, indeed, an unfair act) under some different statute per se determine whether the act is an unfair act or practice under the FAIR Business Practices Act. The question is always whether the act or practice satisfies the Act's particular defmition of "unfair." The FAIR Business Practices Act defines "abusive" practices in line with the federal Consumer Financial Protection Act (12 USC § 5531(d)): Abusive practices are those that materially interfere with someone else's understanding of a term or condition of a good or service, or that unreasonably take advantage of someone else's lack of understanding of relevant risks, inability to protect their own interests, or reason- able reliance on another person to act in their interests. The FAIR Business Practices Act expands this defmition in two ways. First its protections apply beyond consumer financial products as this is a general-purpose statute. Second, it applies to both sides of the commercial equation, such that those who sell goods or services (includ- ing employees and contractors) are just as protected as those who buy them. The Act provides that the prohibition on unfair or abusive acts and practices is enforceable only by the Attorney General. No change is intended to be made to the private right of action, which remains limit- ed to

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.