New York's Department of Financial Services proposed rules to license and supervise BNPL providers operating in the state, opening a 60-day public comment period through September 14. The proposal would require BNPL lenders to get licensed, send monthly billing statements, cap late fees at $8, and set up dispute-resolution processes, according to Bloomberg Law.
This sounds familiar…
I've covered the proposal of these new rules on several occasions during the past year or so. Here's a brief timeline of events:
- New York Governor Kathy Hochul signed the BNPL Act into law back in May 2025 as part of her FY26 budget, but the statute wasn't self-executing. It handed NYDFS the job of writing the actual rules before any of it could take effect.
- NYDFS floated a preproposal draft in February, took informal feedback through March 5, and has spent the months since reworking it into the version published last week. February was a trial run, and this is the formal proposal that actually gets adopted.
- From here, comments close September 14, NYDFS reviews them and publishes a final Notice of Adoption, and the rules take effect 180 days after that.
- Once they do, BNPL lenders already operating in New York get 45 days to file a license application if they want to keep serving customers while it's pending. So Klarna, Affirm, Afterpay, and Block are now on a clock that runs out sometime in 2027.
The Financial Technology Association, the lobby that represents several of the major BNPL providers, put out a statement welcoming “appropriate regulation that reflects the consumer protections and standards already in place at the leading firms” the same day the comment window opened.
It's easy to read that statement as meaning, “We'll endorse rules that codify what we already do voluntarily, and we'll fight anything that goes beyond it.” But maybe I'm being too pessimistic towards an industry I hate (BNPL).
U.S. states have been stepping in to fill the gap the CFPB left in May 2025, when it announced it would stop prioritizing enforcement of its own 2024 rule extending Truth in Lending protections to pay-in-four loans, then rescinded the rule outright. Illinois became the second state with a BNPL-specific law when Governor Pritzker signed its version on June 25.
