New York Leads State Consumer Protection Efforts Amid Federal Pullback, Pennsylvania In Tow

In the wake of reduced federal oversight following the Trump Administration’s rollback of the Consumer Financial Protection Bureau (“CFPB”), New York has emerged as a national leader in filling the regulatory void, with Pennsylvania beginning to follow suit.

On May 9, 2025, New York Governor Kathy Hochul signed into law a set of sweeping consumer protection measures as part of the State’s Fiscal Year 2026 Enacted Budget. These provisions address (1) simplification of online subscription cancellations, (2) standardization of online retail return and refund procedures, (3) regulation of “Buy Now, Pay Later” lending services, and (4) the introduction of novel rules on surveillance pricing. Notably, the surveillance pricing statute is the first of its kind in the country, mandating that businesses disclose when consumer data is used algorithmically to set prices, subject to certain exceptions. “These new laws are about fairness, transparency, and accountability and will help consumers save money and spend it wisely,” said Governor Hochul. The reforms reflect an assertive expansion of consumer protections at the state level and mirror the policy posture of the CFPB during the Biden administration.

In parallel with these legislative developments, New York Attorney General Letitia James has taken a prominent enforcement role. On May 14, 2025, she filed suit in federal court against Capital One, alleging deceptive practices that deprived online savings account holders of millions in interest through “bait-and-switch” tactics. The action closely resembles a CFPB enforcement case filed in January under the Biden Administration and subsequently dropped in February under new leadership. It is one of several abandoned actions since the CFPB began shifting its enforcement priorities. Whether states like New York will continue to assume responsibility for these orphaned cases remains to be seen.

Pennsylvania has also moved to bolster consumer protections under Governor Josh Shapiro’s leadership. On May 2, 2025, Governor Shapiro unveiled a new suite of tools aimed at streamlining consumer access to assistance with scams, financial disputes, and insurance complaints. These include a centralized hotline, an intuitive website, and a dedicated email contact. Shapiro framed the initiative as a “no-wrong-door approach for consumer protection.” “This is part of the Shapiro Administration’s broader effort to protect Pennsylvania consumers as the federal government steps back from its role,” the Governor’s statement explained. “[W]hether it’s a denied health insurance claim, a suspicious financial transaction, or a problem with a student loan servicer, help is now just a call or click away.”

These actions by New York and Pennsylvania illustrate how states can lead in advancing consumer protection amid diminished federal engagement. As more states consider similar initiatives, they could reshape the landscape of consumer advocacy in a post-CFPB-dominant era.