Letter to New York State Department of Financial Services supports tailored consumer protections while urging agency to preserve flexible, risk-based underwriting and established lending channels

Albany, NY (September 14, 2026) – The American Fintech Council (AFC), the largest industry association representing both responsible fintech companies and innovative banks, sent a formal comment letter to the New York State Department of Financial Services (NYDFS) in response to their proposed regulations for Buy Now, Pay Later (BNPL) providers. While supporting NYDFS’s effort to establish clear rules for transparency, fee limits, and dispute resolution, AFC urges regulators to modify the final rule to enable responsible innovation and avoid restricting consumer access to safe and affordable credit options.

“New York has an opportunity to set a modern standard for BNPL regulation that both safeguards consumers and empowers responsible innovation,” said Phil Goldfeder, CEO of the American Fintech Council. “A one-size-fits-all approach for modern digital tools threatens to limit affordable credit options for underserved New York consumers. Regulatory clarity and consumer protection work best when aligned with the operational realities of financial technology, and AFC strongly encourages NYDFS to refine this framework to keep safe credit accessible for all New Yorkers.”

AFC urges NYDFS to align the regulatory definition of a BNPL lender with the legislature’s statutory “primary purpose” standard under Article 14-B. AFC cautions that adopting a broader “substantial purpose” threshold could inadvertently capture multipurpose software platforms, secondary market capital participants, and institutional investors that do not directly offer credit to consumers. AFC also highlights the need to preserve flexible, risk-based underwriting standards. Requiring mandatory assessments of income and indebtedness for every transaction effectively imposes an ability-to-repay requirement that the enacted statute does not contain. AFC member data indicates that certain requirements could potentially reduce responsible credit in New York by more than $500 million annually.

“A final rule grounded in flexible, risk-based underwriting will uphold the industry’s best practices and ensure that BNPL loans are made available to New York consumers in a responsible manner,” said Ian P. Moloney, Chief Policy Officer of the American Fintech Council. “AFC appreciates the opportunity to provide thoughtful feedback on NYDFS’ proposed regulatory framework and remains committed to serving as a collaborative partner to ensure a clear, workable supervisory BNPL regime for New York.”

AFC additionally recommends streamlining consumer disclosures by leveraging real-time electronic account interfaces, rather than mandating monthly periodic statements. This connects with the need to synchronize proposed consumer data privacy and deletion requirements with existing federal frameworks, particularly the Gramm-Leach-Bliley Act and Regulation P, to ensure institutions can fulfill legal, fraud prevention, and recordkeeping obligations. To ensure a smooth transition, AFC urges NYDFS to extend the application filing window from 45 days to at least 90 days, and grant provisional operating authority while reviews are pending.

A standards-based organization, the American Fintech Council (AFC) is the largest and most diverse trade association representing financial technology (fintech) companies and innovative banks. On behalf of over 150 member companies and partners, AFC promotes a transparent, inclusive, and customer-centric financial system by supporting responsible innovation in financial services and encouraging sound public policy. AFC members foster competition in consumer finance and pioneer products to better serve underserved consumer segments and geographies.

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