Consumer protection law is designed to protect the public from unscrupulous business schemes. It was never intended to make state bureaucrats the arbiter of every transaction between private parties, much less sophisticated financial actors.

That was the distinct message that arose out of last week’s appeals court hearing in state Attorney General Letitia James’ unabashedly politicized civil fraud case against Donald Trump.

As readers will recall, Judge Arthur Engoron, an elected Democratic hack in a robe, ordered the former president to pay nearly half a billion dollars in fraud damages … despite the total absence of fraud victims.

James may edge out her fellow progressive Democratic Trump tormentor, Manhattan District Attorney Alvin Bragg, for what we might call the Lavrentiy Beria Award — named for Stalin’s most notorious Soviet secret police chief, who coined the phrase, “Show me the man and I’ll show you the crime.”

Having campaigned for office promising that, if elected, she would find a way to wield her powers against the Democrats’ archnemesis, James did the unprecedented: She invoked against Trump a consumer protection statute — Executive Law §63(12) — enacted to protect the public from “persistent fraud” practices

The legislature’s intention was to empower the attorney general to take action against scammers who broadly defraud the public but don’t harm any single consumer badly enough that it would be worth the prohibitive expense of bringing an individual lawsuit.

Even in its intended application, the law is vague: The AG may sue even if the alleged scheme is not actionably criminal, as long as she deems it somehow deceptive.

But §63(12) was never meant to turn the AG into what James aspires to be: the uber-regulator of all business conducted in the Empire State.

In particular, it was not intended to let the state government intrude into business transactions between financial professionals that involve no criminal activity.

Trump’s case demonstrates the monstrousness of §63(12) when stretched as James stretched it.

Trump is a longtime international real estate and business magnate, who has decades-long relationships with banks and insurers. James alleged that he engaged in persistent fraud, for over a decade, in conducting business with these counterparties.

He did so, she alleged, by inflating the value of his assets to obtain more favorable interest rates and coverage premiums. Yet none of these counterparties was defrauded; instead, they made money.

Moreover, even if we stipulate that Trump overvalued some of his assets (tripling the size of his luxury Manhattan apartment, for example), Trump’s statements of financial condition admonished counterparties to perform their own due diligence regarding any loans or contracts.

He needn’t have done even that, since his counterparties were top-tier financial professionals for whom pricing risk is their bread and butter. These banks and insurers also have top top-tier legal representation and the deep pockets to pay for litigation; if they get swindled, they sue.

With Trump, to the contrary, they kept doing business.

With no fraud victims, James was left to concoct fraud damages.

Indulged at every turn by Engoron — who dutifully found Trump liable on the persistent fraud allegation before the trial even started — James introduced testimony from a cooperative banking expert who dreamed up a formula for what higher rates counterparties would have charged Trump had he accurately stated his asset values — despite the absence of evidence that any of these financial professionals had actually relied on Trump’s asset values.

How arbitrary was this? James started out by claiming $250 million in “fraud” damages. By the end of the three-month trial, at which she proved no fraud, she nevertheless upped her damage claim to $370 million.

As night follows day, Engoron gave her what she wanted; in conjunction with interest charges that continue to compound, the staggering result is nearly $500 million — a corporate death penalty.

Well, as the old adage holds, the wheels of justice grind slowly but they grind exceedingly fine. Trump has appealed, and at last week’s oral argument, a five-judge panel of the appellate division was demonstrably troubled by James’ case.

Mostly, the judges worried aloud that the AG had overstepped her jurisdiction and had no business refereeing private transactions between sophisticated financial actors.

Most judges seemed unmoved by the state’s tenuous claim that Trump’s lenders must have dealt more unfavorably with the public due to the risks attendant to dealing with Trump.

Oral argument is not always a reliable indicator of how a court will rule. In this instance, though, the penalty imposed is so out of proportion with Trump’s alleged wrong that it smacks of a US constitutional violation of the prohibition against cruel and unusual punishments.

It would be a reach at this stage to predict a sweeping Trump victory, but I believe a significant reduction in the ludicrous penalty is very likely.

Remember, if a malevolent partisan prosecutor can do this to Trump, she can do it to any person, business or cause that offends progressive Democrats.

That’s fine by James, but it may thankfully have dawned on the appellate court that, if those are the new rules, New York City can’t survive as the world’s center of commerce.