Buy Now/Pay Later: New York Moves Forward After CFPB Makes a U-Turn
Financial Services attorneys Bob Jaworski, Leonard Bernstein, Paul Libretta and Veronica Ruiz published an article in The Conference on Consumer Financial Law (CCFL) Quarterly Report on New York's new Buy-Now-Pay-Later Act (BNPL Act). Now a defining feature of modern consumer finance, BNPL loans allow consumers to pay for products or services in installments instead of one lump sum, without using a credit card or cash. However, with the influx of BNPL options has come regulatory scrutiny over potentially unfair lending practices and a push for education on responsible borrowing. The authors begin their article by describing the federal Consumer Financial Protection Bureau's (CFPB) approach. Under the Biden Administration, the agency issued an interpretative rule classifying BNPL lenders as credit issuers and BNPL accounts as credit cards, thus bringing both under the purview of the Truth in Lending Act (TILA); under the Trump Administration, however, the CFPB has elected not to prioritize enforcement of this rule and signaled it plans to rescind it. The article then transitions to focus on New York's approach: In May 2025, Gov. Kathy Hochul signed the BNPL Act, introducing licensing requirements for BNPL lenders alongside measures including limits on charges and fees and data privacy protections. The authors detail the law's scope, licensing obligations, oversight authority for the state's Department of Financial Services and various consumer protection provisions. They note New York's path contrasts the road taken by the federal government and warn BNPL companies and financial institutions to monitor the financial regulatory landscape in case other states follow New York and create their own regimes.
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Financial Services attorney Eamonn Moran and Litigation and Dispute Resolution attorney Ashley Feighery also wrote an article for this report on the CFPB's deregulatory actions.