”Appropriate regulation for innovative financial services should provide clarity and a level playing field, promoting greater choice and transparency for consumers. The Buy Now Pay Later (BNPL) legislation put forth by New York Governor Kathy Hochul as part of the 2025 state budget represents an important step forward in the pragmatic, consistent regulation of BNPL, including the requirement that every transaction to be underwritten. Many provisions are consistent with AFC's existing BNPL standards, which represent best practices in the industry. But while some provisions are a step in the right direction, other language has the potential for unintended consequences that would limit consumer choice, decrease responsible access to credit, and create an uneven playing field.

“Responsible BNPL products are fundamentally different credit products that provide important options for New Yorkers, who are increasingly seeking more flexible and transparent credit alternatives offering clear and upfront terms without revolving debt. In some cases, pay-over-time products offer interest-free financing without any late fees or hidden charges. 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.

“We look forward to our continued collaboration with Governor Hochul, the Department of Financial Services, and leaders in the Senate and Assembly to develop consistent regulatory standards that ensure New Yorkers can continue to access responsible financial products.”

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