NCLC submitted comments to the New York Department of Financial Services in response to its request for information on buy now, pay later products. The comments address issues that DFS should consider when writing regulations in order to protect consumers.
The BNPL Act gives DFS broad authority to promulgate rules consistent with the purposes of the Act to protect consumers and to define deceptive or unfair practices. DFS should use that authority to ensure that BNPL loans are safe, fair and nondiscriminatory. Strong rules are especially important in light of the fact that subprime and deep subprime consumers take out most BNPL loans and that BNPL credit is disproportionately used by Black and Hispanic consumers, who already face disadvantages in the credit marketplace.
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