U.S. Senators from New York, Rhode Island, Maryland, and Connecticut introduced legislation to extend Truth in Lending Act protections to pay-in-installment loans so that BNPL loans carry the same core protections as credit cards.
The Buy Now, Pay Later Protection Act seeks to mandate standardized periodic statements, clear dispute and refund rights, and the disclosure of all fees upfront to prevent predatory practices.
N.Y. Senator Gillibrand said:
“As prices continue to skyrocket, Buy Now, Pay Later options can be a helpful tool for families, especially during the holiday season. But as these loans have become more popular, we’ve seen predatory companies exploit a lack of regulation by charging hidden fees and trapping families into paying more than they bargained for. Our legislation will protect consumers, establish clear rules of the road, shine a light on the true cost of these products, and strengthen the rights of New Yorkers and families across the country.”
The push follows several years of failed or incomplete efforts to bring BNPL under existing credit regulation.
In 2024, the CFPB attempted to classify BNPL products as credit cards under the Truth in Lending Act, which would have imposed disclosure, billing, and dispute protections without new legislation, but that effort was quickly challenged by industry groups, tied up in court, and effectively sidelined after the current administration moved to scale back the agency’s regulatory reach.
As far back as 2022, the FTC moved to scrutinize BNPL through enforcement and research rather than direct regulation, issuing warnings to BNPL providers about deceptive marketing, hidden fees, and dark patterns. The FTC also opened inquiries into data usage, repayment practices, and whether BNPL firms were improperly profiting from consumer data. However like the CFPB push, those efforts did not result in a comprehensive regulatory framework.
This proposed Buy Now, Pay Later Protection Act could change that by establishing BNPL rules directly through Congress, rather than relying on agency interpretation or enforcement.
