New York State floats BNPL legislation in FY 2025 budget

State Issues BNPL New York Consumer Finance Licensing

On January 14, New York proposed its FY 2025 budget: Transportation, Economic Development and Environmental Conservation Article VII Bill, which includes an article, cited as the “Buy Now Pay Later Act” (the “Act”). The Act includes new licensing provisions, requiring buy now pay later (BNPL) financing providers (referred to as “lenders” within the Act) to pay a fee and file a written application to receive a license in order to provide BNPL loans. BNPL lenders would also be required to submit an affidavit of financial solvency, disclose their license on their website, app, or other consumer interface, and list the license in the terms and conditions of any BNPL loan offered and entered by the licensee. Licensees would also be subject to supervisory investigations. The Act would further require BNPL lenders to (i) maintain policies for ensuring the accuracy of data that may be reported to credit agencies; (ii) disclose certain loan terms; (iii) engage in limited ability-to-repay analyses; (iv) refrain from charging unfair, abusive, or excessive fees; and (v) abide by certain restrictions and disclosure requirements relating to the use of consumer data, among other things.