States Can Protect Buy Now, Pay Later Borrowers

February 12, 2026 — Press Release

New York BNPL Law Creates a Blueprint for Protecting Shoppers Nationwide

WASHINGTON – As cash-strapped consumers increasingly turn to Buy Now, Pay Later (BNPL) loans, a New York law provides a framework for how states can protect people from hidden charges, problematic purchases, unaffordable debt and other risks. 

A new issue brief from the National Consumer Law Center (NCLC) shows how other states can adapt and build on the New York Buy-Now-Pay-Later Act (NY BNPL Act) to strengthen protections for  borrowers in their states. 

“Many Buy Now Pay Later users have subprime credit scores and high debt loads making BNPL loans risky, so it is critical that states step up to fill the gaps in consumer protections,” said Lauren Saunders, associate director and director of federal advocacy at NCLC. “State protections and oversight for BNPL loans are especially important now that the Consumer Financial Protection Bureau (CFPB) has been gutted and federal protections are in question.” 

While the typical four-payment BNPL loan promises “no interest,” some charge a range of hidden fees. Unaffordable loans and complicated repayment dates can trigger overdraft fees and leave people without funds for necessities. BNPL lenders do not always provide the same clear dispute rights as credit cards if a purchase is returned or you don’t get what you paid for.

Building on the New York model, states looking to regulate BNPL lenders should address:

1. The different types of BNPL loans
2. Clear disclosures
3. Fee and interest limits
4. Responsible underwriting for ability to repay 
5. Repeat debiting that triggers overdraft fees
6. Credit reporting and data sharing
7. Refunds, disputes, and errors
8. Easy cancellation of subscriptions, such as “click to cancel”
9. Unfair, deceptive or abusive practices.
10. Fair lending
11. Language access
12. Consumer remedies
13. Reports, available to the reports

“Strong protections for Buy Now, Pay Later loans are especially important as new forms of split payment loans spread beyond retail to rental housing, medical debt, debt settlement and other areas,” Saunders added.

Related Resources

• Holiday Shoppers Beware! Dangers Lurk in Buy Now, Pay Later and Deferred Interest Credit Card Offers, Nov. 24, 2025
• Buy Now Pay Later Comments to NY Dept of Financial Services, Sept. 12, 2025
• What Rights Do Buy Now, Pay Later Purchasers Have?, June 26, 2025
• Risks and Advice for Buy Now, Pay Later Borrowers, May 19, 2025
• New Rights for Buy Now, Pay Later Purchases, Dec. 2, 2024
• CFPB Publishes New Findings on Financial Profiles of Buy Now, Pay Later Borrowers, March 2, 2023