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Last week, attorneys general from 13 states filed a federal lawsuit in the Southern District of New York against OneMain Financial (OneMain) and affiliated companies, alleging deceptive and unfair practices related to the sale of its loan “add-on” products.

Led by New York Attorney General Letitia James, the multistate coalition asserts that OneMain’s practices violate the federal Consumer Financial Protection Act (CFPA) and state consumer protection and banking laws. The case serves as an important reminder that while the CFPB’s enforcement activity has waned during the Trump administration, the states continue to have the ability to enforce the CFPA, and certain states are willing to try and fill the enforcement gap left by the CFPB’s retreat. 

Alleged Deceptive Loan Add-On Practices

The complaint alleges that OneMain offered these optional add-on products, such as credit insurance and membership services, and incorporated their cost into the loan principal, resulting in undisclosed interest charges for the add-ons. In some cases, the complaint alleges, OneMain added these products without borrowers’ consent, charging customers for add-ons even after they declined them.

Continue Reading State AGs Sue OneMain Financial Over Deceptive Loan Add-Ons 

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.

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

This week, New York Attorney General Letitia James announced a $1.1 million settlement with JBS USA Food Company and JBS USA Food Company Holdings (JBS) over allegations that the meat producer misled consumers about its commitment to reduce its environmental impact. In February 2024, the AG filed suit, alleging that JBS’s consumer-facing statements that it would achieve “net zero” greenhouse gas emissions by 2040 were deceptive “greenwashing” because the company lacked a viable plan to achieve that goal.

As we reported in January, a New York Supreme Court judge dismissed the AG’s complaint (with leave to amend). Following the dismissal, the AG continued to investigate JBS’s net zero statements by issuing a subpoena and, with JBS, agreeing twice to extend the response deadlines. JBS ultimately provided eight sets of documents in response to the subpoena, after which the AG agreed to resolve the matter through an Assurance of Discontinuance in lieu of filing an amended complaint alleging violations of New York consumer protection statutes. 

Continue Reading New York AG Secures $1.1 Million Settlement with JBS Over Greenwashing and Net Zero Claims

Earlier this month, New York Attorney General Letitia James issued a Notice of Proposed Rulemaking aimed at setting greater guardrails against price increases during emergencies. The action comes exactly one year after James first initiated the rulemaking process by seeking comment regarding potential price gouging during the COVID-19 pandemic.

After amending the price gouging statute to expand its scope, in 2020 the New York legislature granted James rulemaking authority. In March 2022, James launched the first rulemaking process with an Advance Notice of Proposed Rulemaking, which sought public comment on whether and how the attorney general might provide regulatory guidance in the area of price gouging. Advocacy groups, consumers, industry representatives, and academics submitted comments, which have informed James’s proposed rules. The proposed rule tightens the screws on companies the AG believes are taking unfair advantage of market disruptions.

Continue Reading New York AG Proposes New Price Gouging Rules