New York City may soon become the most aggressive consumer-protection jurisdiction in the country, and enforcement would come through private lawsuits rather than through a regulator.

On October 8, at Mayor Zohran Mamdani’s request, the city council introduced Int. No. 1105, the People and Organizations Winning Economic Relief Act, or “POWER Act.” The bill is now before the Committee on Consumer and Worker Protection. The administration says it would allow “individuals, workers, and small businesses” to sue over unfair methods of competition and unfair, deceptive, abusive, or unlawful practices.

Any company that sells to New York City residents should be watching this bill. Here is what it would do, why it matters, and the legal questions it is likely to raise.

What the Bill Would Do

At its core, the POWER Act prohibits “[u]nfair methods of competition and unfair, deceptive, abusive or unlawful acts or practices in or affecting business, trade, or commerce.” Its central feature is a private right of action. Any person injured by a violation may sue on their own behalf, on behalf of “a group of similarly situated persons,” or on behalf of “the general public.” Available relief includes:

  • actual damages;
  • $2,500 per violation;
  • injunctive and declaratory relief; and
  • attorney’s fees and costs, which are mandatory for a prevailing plaintiff.

Nonprofits get their own path to court. They may sue on behalf of their members or the public, including over goods or services they bought specifically to test them.

The bill says it fills a gap in state law. Even after the 2026 FAIR Business Practices Act strengthened General Business Law § 349, New York “still does not provide a private right of action for claims alleging unfair and abusive acts or practices.” The council explicitly points to New Jersey’s Consumer Fraud Act as a model.

Why It Would Matter

It removes the traditional limits on General Business Law § 349 claims. Under § 349, a plaintiff must show three things: consumer-oriented conduct, a materially misleading act, and an actual injury. New York courts have used the injury element to dismiss claims where the plaintiff’s only alleged harm is that they would not have bought the product had they known the truth. In those cases, the “deceptive conduct cannot be pled as both act and injury.” The POWER Act takes on each of these limits directly:

  • Injury. “Injury” means any impairment of a person’s lawful interests, “whether or not … quantifiable, economic, or monetary,” and includes “loss of time, loss of privacy, loss of security.”
  • Reliance and scope. No reliance is required. Claims are not limited to consumer-oriented conduct or to personal, family, or household transactions.
  • Abusive practices. The bill adds an “abusive” standard that reaches any practice that “materially interferes with the ability of a consumer to understand a term or condition.”

The definitions are broad and borrowed from federal law. “Unfair method of competition” includes “coercive, exploitative, collusive, abusive, deceptive, predatory, restrictive, or exclusionary conduct” that affects “consumers, workers, or other market participants.” The legislative findings tell courts to read the bill in line with two federal policy statements: the Federal Trade Commission’s (FTC) 2022 policy statement on § 5 and the Consumer Financial Protection Bureau’s 2023 policy statement on abusive practices. Both are to be followed “regardless of whether such policy statement is active, superseded, or rescinded.”

“Unlawful” is undefined. The bill never defines what makes a practice “unlawful.” Plaintiffs could therefore use the law to sue over violations of other rules that have no private right of action of their own. Candidates include city pricing and fee-disclosure rules, tip- and pay-transparency requirements, and federal FTC Act standards. The only built-in defense is narrow: it covers conduct that is required by federal rules or statutes.

Damages could add up quickly. The $2,500 figure applies “per violation,” and the bill does not say what counts as a single violation or cap the total. For a business with high transaction volume, a per-transaction theory could produce enormous exposure even where actual losses are small. Suits may be brought within three years of when the plaintiff knew or should have known of the violation.

The pre-suit notice is not a cure period. Before filing, a plaintiff must send notice and give the business 10 business days to show in writing “why such action … should not be commenced.” The notice does not limit the claims a plaintiff can later bring. Nothing in the bill makes correcting the practice a defense.

The small-business exemption is very narrow. It covers only businesses that are independently owned, not dominant in their field, employ four or fewer people, and had less than $5 million in gross revenue the prior year. Most franchisees, local chains, and mid-sized employers would be covered by the law.

If the bill is enacted, expect immediate challenges on several fronts.

Preemption. Under New York law, a local law is preempted if it directly conflicts with a state statute (conflict preemption) or if the legislature intended to occupy the entire field (field preemption). Courts treat a local law as conflicting with state law when it prohibits what state law permits, or adds restrictions on rights that state law grants. Recent decisions have often rejected preemption challenges to city laws, so a field-preemption attack may be difficult. Two narrower arguments may hold up better:

  • Conflict with § 349. Section 349 reflects the legislature’s choices about how far private enforcement should go, and the bill’s own findings acknowledge that the state has not created this right of action.
  • CPLR 901(b). That rule generally bars class actions seeking statutory penalties or minimum damages unless the statute specifically authorizes class recovery. Whether a local law can override it is an open question.

Federal standing. In Ramirez, the Supreme Court held that only plaintiffs who are “concretely harmed” by a statutory violation have standing to seek damages in federal court. The Second Circuit applied that rule to New York statutory penalties in Maddox. Claims based only on intangible harms such as “loss of time” may not satisfy Article III. That could push POWER Act litigation into state court, where plaintiffs can argue that they lack Article III standing in federal court to defeat removal.

Arbitration. The Federal Arbitration Act still applies, so arbitration agreements with class waivers will generally reach individual consumers’ claims. Representative claims on behalf of “the general public” are harder to predict after Moriana. In California, courts have continued to apply McGill, which refuses to enforce waivers of public injunctive relief. Nonprofit plaintiffs are the biggest open question. Under EEOC v. Waffle House, a party that never signed the arbitration agreement is not bound by it, and consumer groups are already making that argument in statutory public-interest cases.

Other constitutional questions. Uncapped, aggregated statutory damages may invite due process challenges. Applying the law to businesses outside the city or the state that deal with city residents may also raise questions about municipal authority and the dormant Commerce Clause.

The Broader Agenda

The POWER Act is part of a larger package. A companion bill would let the Department of Consumer and Worker Protection (DCWP) penalize “unconscionable” practices without first going through rulemaking. A proposed Truth in Pricing Act would revise the city’s price-display rules. Both measures come alongside ongoing DCWP initiatives on hidden fees and subscription practices. Various business groups have already opposed the bill as drafted. Consumer and worker advocates, including the American Economic Liberties Project and the Legal Aid Society, support it.

What Businesses Should Do Now

The bill is still in committee and may change. Companies that do business with New York City residents should not wait, however:

  • Pricing and fees. Review pricing, fee, and checkout disclosures, especially any fees or price differences that are not shown until late in the purchase process.
  • Arbitration terms. Audit consumer terms of service to confirm customers affirmatively accept them. Consider updating severability clauses and adding mass-arbitration protocols.
  • Regulatory compliance. Check compliance with city and federal rules that could be recast as “unlawful” practice claims.
  • Notice letters. Set up a process so pre-suit notices go straight to legal, and treat any written response as a litigation document.
  • Legislative engagement. Points worth raising with the city council include:
  • a definition of “unlawful”;
  • a real right to cure;
  • a definition of “violation” and a cap on total damages;
  • a broader federal safe harbor; and
  • prospective-only application.

We will continue to track Int. No. 1105 as it moves through the council.