New York Seeks Public Comment on Proposed BNPL Regulations

The New York State Department of Financial Services has published and opened for comment proposed regulations for buy now, pay later (BNPL) financing options.

The draft regulations for BNPL lenders were posted Monday (Feb. 23) and will be open for preproposal comment until March 5, according to the DFS website. After that, when the proposed regulation is published in the State Register, there will be a 60-day public comment period, according to a Monday press release from the office of New York Gov. Kathy Hochul.

The proposed rules will put into practice the law signed by Hochul as part of her fiscal year 2026 budget, according to the release.

They establish a licensing and supervision framework for BNPL providers, as well as required disclosures, dispute resolution standards, limits on fees and data privacy protections, according to the release.

“These new nation-leading regulations ensure that lenders know we have clear disclosures, limits on fees and real oversight so families don’t get pushed into a debt spiral while big financial companies cash in,” Hochul said in the release.

DFS Acting Superintendent Kaitlin Asrow said in the release: “It is our responsibility to ensure that innovation is paired with strong consumer protections, so that New Yorkers can safely and securely use new financial products.”

Consumer Reports said Monday that BNPL loans lack many of the consumer protections that come with other forms of credit.

“New York’s proposed buy now, pay later regulations would provide the strongest, most comprehensive protections for consumers of any state and are a model for lawmakers across the country,” Chuck Bell, special projects director at Consumer Reports, said in a Monday press release.

The legislation to provide oversight to the BNPL sector was introduced as part of Hochul’s budget in May 2025.

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

“Unfortunately, the definitions of BNPL in this new law are not clear, possibly capturing additional products, and the language would improperly apply regulations designed specifically for credit cards to the emerging pay-over-time sector,” American Fintech Council CEO Phil Goldfeder told PYMNTS in May.