New York Regulator Proposes Licensing Rules for BNPL Lenders

The New York State Department of Financial Services (DFS) posted a notice of proposed rule making regarding buy now, pay later (BNPL) lenders together with the text of the proposed regulation Wednesday (July 15) and will accept public comment on the proposed regulation until Sept. 14, according to the department’s regulatory activity page.

“Today DFS formally proposed regulations to establish a licensing and supervision framework for buy now, pay later (BNPL) providers operating in New York,” the department said in a Wednesday post on X. “The proposal opens a 60-day comment period.”

Bloomberg Law reported Wednesday that some of the proposal’s provisions include requirements that BNPL lenders get licensed, that they send out monthly billing statements, that they cap their late fees at $8 and that they set up dispute resolution processes.

The Financial Technology Association (FTA) said in a Wednesday statement that with the proposed regulations, the DFS is working to implement a BNPL law that the New York legislature passed as part of the state’s 2025 budget.

“We appreciate the work the Department of Financial Services has put into crafting these proposed regulations and look forward to submitting our comments,” FTA President and CEO Penny Lee said in the statement. “As the buy now, pay later industry continues to grow, we welcome appropriate regulation that reflects the consumer protections and standards already in place at the leading firms.”

PYMNTS reported in May 2025 that New York’s budget included legislation to establish a licensing and supervision framework for BNPL providers and that the legislation will include guardrails like disclosure requirements, dispute resolution standards, limits on fees and charges, and data privacy protections.

The American Fintech Council said at the time that while many provisions in the legislation were in keeping with its own BNPL standards, other language could potentially limit consumer choice and reduce credit access.

PYMNTS reported in February that the DFS published proposed regulations for BNPL financing options and that the draft regulations would be open for preproposal comment until March 5.

Consumer Reports said at the time that BNPL loans lack many of the consumer protections that come with other forms of credit and that New York’s proposed BNPL regulations would provide the strongest protections for consumers of any state.