The erosion of federal enforcement under the former Trump administration has resulted in the ascent of state attorneys general as prominent enforcers across various legal domains. As the Consumer Financial Protection Bureau and traditional federal enforcement agencies experience significant cutbacks, state AGs are stepping into the breach, increasingly pursuing aggressive investigations with novel legal theories, particularly in consumer protection.
This shift emphasizes the growing need for companies to remain vigilant and avoid falling into compliance complacency. Given that state AGs possess broad legal authority under unfair and deceptive practices statutes, and state-level consumer protection and privacy laws, they are well-positioned to address perceived enforcement gaps. For example, California Attorney General Rob Bonta has reminded businesses that despite federal pauses, they remain at risk of prosecution for foreign bribery under state laws, as highlighted in his warning to businesses.
The decline of federal oversight has encouraged states to craft their own privacy and cybersecurity legislation. AGs are actively pursuing litigation related to social media’s effects on children, user data tracking, and data security lapses. A significant settlement was recently achieved by Texas AG Ken Paxton with Google LLC, amounting to $1.75 billion, tackling alleged illegal data tracking.
Beyond consumer protection, state AGs are also keen on regulating emerging technologies, such as artificial intelligence. States have issued advisories on how existing laws apply to AI, exemplified by recent publications from AG offices in California, Massachusetts, and Oregon.
In the realm of consumer financial protection, states are also making notable contributions. This development became evident when NY AG Letitia James initiated legal proceedings against Capital One Financial Corp. for alleged deceptive practices. Alternatively, Massachusetts AG Andrea Joy Campbell secured a court order requiring UnitedHealth Group insurance companies to pay restitution and penalties for deceptive sales practices.
Ultimately, the retreat of federal enforcement activities has prompted state AGs to ascend as key regulators, a progression that corporate entities must consider in their risk management strategies and regulatory engagements. Companies should be aware of the evolving landscape and the vigorous enforcement posture that state AGs are adopting to address areas where federal efforts have diminished. For a more detailed overview of this topic, please visit the full article on the Bloomberg Law website.