On Wednesday, lawmakers said a bill to strengthen consumer protections in the state will be amended after stiff pushback from New York business leaders about the measure's potential detriment to small businesses.  

The Business Council of New York State has led negotiations with state Attorney General Letitia James' office for weeks after James has lobbied the Legislature to pass the Fostering Affordability and Integrity through Reasonable Business Practices, or FAIR Business Practices Act.

The bill would change state law to specifically prohibit "unfair" and "abusive" business practices, which James said would empower her office to fight deceptive business practices, like predatory lenders, student loan services, nursing homes, debt collectors and others.

"A number of other states, I believe 23 other states, have unfair business laws on the books," she told lawmakers in Albany last month.

Business leaders and the attorney general's staff have worked to reach a compromise as lawmakers move to pass the proposal with fewer than 10 days on the legislative calendar. James has put the pressure on lawmakers to pass the bill this session after President Donald Trump largely dismantled the Consumer Financial Protection Bureau.

But business organizations from across the state have blasted the proposal, voicing concerns it would open up small businesses to frivolous lawsuits from third parties without justification.

The attorney general's office said proposed changes to the legislation include:

• The definition of harm/injury will remain the state’s existing injury standard, which requires all private plaintiffs to show “actual, though not necessarily pecuniary, harm."
• Removed mention of third party and organizational standing to address industry concerns about third-party lawsuits.
• Eliminate language requiring businesses to pay statutory fees to cure a complaint, make it easier to cure a complaint and avoid litigation and less likely attorneys will use these cases just to collect fees.
• Businesses that cure a complaint within 30 days will not pay liability or attorneys' fees.
• Cap potential statutory damages to account for small businesses: Cap is the lesser of $1 million or 2% of a defendant’s net worth at time of action to benefit small businesses.
• Additional civil penalty for vulnerable populations no longer available for a private right of action.

But officials with the Business Council of New York State said Wednesday the changes haven’t absolved their issues with the proposal, and they remain skeptical of the changes until new legislation is introduced.

"We have had discussions with the attorney general's office on the bill and we have had similar discussions with both houses and the governor's office,” a council spokesperson said in a statement. “We will continue to engage with all parties, but significant concerns remain from the business community on how the bill could adversely impact affordability for businesses and consumers alike.”

Ashley Ranslow, the New York state director of the National Federation of Independent Business, agrees, and said it will come down to the details in the new legal language.

"It could really harm small business owners because of the vague definitions and vague provisions within the [current] bill," Ranslow told Spectrum News 1. "... It's just going to extract thousands of dollars out of small business owners, and thousands of dollars is a big deal for a small business owner."

Ranslow said the current bill would allow private attorneys to target small businesses that don't have the finances to defend themselves.

"They know they don't have the attorneys on staff to fight it, and they know that they are most willing to settle it and settle it quickly," she said.

James told lawmakers last month the the reforms will protect New Yorkers from scams and stop predatory lenders — and small businesses are often the victims of predatory lending. The Small Business Majority supports the bill, arguing safe lending has decreased over the last century.

Assembly sponsor Micah Lasher said the amendments will fix businesses' concerns about litigation, and there's momentum to get the bill over the finish line in the remaining days of session.

"We are taking feedback from the business community trying to make sure that the bill is responsive to concerns that are legitimate while not trying to chase illegitimate fear-mongering that is par for the course in Albany," he said Wednesday. "If you take advantage of a New York consumer, we want to make sure that the consumer has recourse and that the consumer can be made whole ... We have very weak laws that haven't been updated in 45 years and it's time to correct them."

AG James took over the fight this session after Gov. Kathy Hochul put consumer protection reforms in the budget a year and a half ago, but the changes never made a final deal.