New York Democrat Representative Dan Goldman introduced a bill that would give BNPL users the same legal protections credit-card holders get, an area where they currently have no federal safeguards. The Buy Now, Pay Later Consumer Protection Act would require BNPL providers to spell out fees clearly, send periodic statements, give borrowers a window to pay before they're hit with late fees or dinged on their credit, and grant dispute rights like refunds on returns and protection from unauthorized charges.
The bill follows the Trump administration's reversal of a 2024 CFPB rule that would have regulated BNPL loans like credit cards, which had left users without federal protection. Goldman said the bill responds to more Americans leaning on BNPL for everyday costs, taking a stab at President Trump by saying, “In Trump’s nosediving economy, Americans are increasingly being forced to use Buy Now, Pay Later to cover basic expenses.”
If this sounds familiar, it's because the bill is very similar to one proposed in December 2025 by U.S. Senators. That one was called The Buy Now, Pay Later Protection Act, while this new one from Goldman is called The Buy Now, Pay Later Consumer Protection Act. LOL, the names keep getting longer, but the lack of consumer protection in the space remains the same.
Meanwhile, states aren't sitting around waiting for Congress to figure their shit out (because that might be a while)…
- This past March, New York unveiled the nation's first comprehensive regulatory framework for BNPL lenders, stepping in on a state level to fill the regulatory gap that the CFPB left.
- Last week, Illinois passed its own bill requiring BNPL lenders to register with the state, disclose terms, and weigh a borrower's ability to repay before extending Pay in 4 and other point-of-sale installment loans. The bill now heads to the Governor for approval.
- In 2023, California determined pay-in-four products were loans under its lending law and required providers like Afterpay and Klarna to get California Financing Law licenses, which was a step in the right direction, but not quite a comprehensive consumer-protection package like the one New York built.
- Oregon and Washington have also actively pushed BNPL operators to obtain licenses, treating the pay-in-four model as consumer lending regardless of whether interest is charged.
- Massachusetts uses its existing small loan and criminal usury statutes to monitor and penalize out-of-state fintechs that don't comply with state interest and fee caps.
While Congress may be dragging its feet with nearly identical bills across the Senate and House of Representatives that inevitably get nowhere because they're all still on vacation, states are starting to step up with their own regulation. I'll keep you posted as more dominos fall.
