US State-Level BNPL Regulation Spreads
Key Questions
What rules has the New York Department of Financial Services proposed for BNPL providers?
The NYDFS proposed formal BNPL rules covering licensing, fee caps including an $8 late fee and 16% interest cap, underwriting standards, and data privacy requirements. Similar measures are appearing in other states, creating a patchwork of regulations.
How is Oregon approaching BNPL regulation and what has been the industry response?
Oregon proposed rules that treat BNPL like payday lending. The American Fintech Council has pushed back by sending a comment letter asking the state to reconsider these proposals.
What recent BNPL consumer protection law was passed in Illinois?
Illinois passed the BNPL Consumer Protection Act, which includes licensing, underwriting requirements, and a 36% interest cap. This contributes to the growing state-level regulatory landscape for the industry.
The New York Department of Financial Services (NYDFS) proposed formal BNPL rules including licensing, fee caps ($8 late fee, 16% interest cap), underwriting, and data privacy. Oregon proposed rules treating BNPL like payday lending, with the American Fintech Council pushing back. Illinois just passed a BNPL Consumer Protection Act with licensing, underwriting, and a 36% interest cap. This patchwork of state-level regulation increases compliance costs but also legitimizes the industry. For Klarna, operating in multiple states, this is a key regulatory signal extending beyond the UK. A recent article on BNPL for groceries with high APR reinforces the consumer risk narrative.