New York releases draft BNPL rules

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To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. The state of New York has released a proposal for its new buy now, pay later rules, calling it a “new nation-leading” template for ensuring consumer protections. The proposed regulations would codify a bill passed last year by the state’s legislature and signed by Gov. Kathy Hochul. The governor touted the proposal in a press release Monday and the New York Department of Financial Services posted the rules for BNPL lenders online Monday.The industry objects to the rules, considering them overly burdensome, while consumer advocates see New York’s BNPL regulations as a possible inspiration for regulatory changes in other states. The buy now, pay later bill, which Hochul signed on May 9, provided a regulatory framework for the oversight, but left implementation largely to the Department of Financial Services.The rules would — among other things — establish a licensing regime for providers of short-term installment loans, prohibit excessive fees, compel companies to tell consumers if their loans will be reported to credit bureaus and require BNPL firms to establish timely rules for consumer disputes. The proposal also seeks to tamp down on certain consumer costs, such as convenience fees, and requires companies to protect consumer privacy.BNPL providers would also be forced to prominently display the methods by which consumers can contact customer service, and customer service lines would have to be open at least 10 hours a day. The proposal is subject to a 10-day, pre-proposal comment period that started Monday and is more limited in terms of procedural weight, before they are formally proposed in the New York state register. After they are proposed, a 60-day public comment period ensues. The regulations would take effect 180 days after they are adopted, with a transition period for BNPL lenders already offering BNPL services in the state.A spokesperson for the National Consumer Law Center declined to comment on the proposal, but referred to a Feb. 12 statement the group released touting New York's law as a template for other state legislatures. “State protections and oversight for BNPL loans are especially important now that the Consumer Financial Protection Bureau has been gutted and federal protections are in question," the group's director of federal advocacy, Lauren Saunders, said in the statement, referring to the Trump administration's steep budget cuts at the regulatory agency.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,944.12 +54.05 (+0.78%)Dow 3049,457.46 +282.96 (+0.58%)Nasdaq23,147.52 +283.84 (+1.24%)Russell 20002,665.02 +12.69 (+0.48%)VIX18.36 -1.19 (-6.09%)Gold5,226.40 +50.10 (+0.97%)Trending tickersBTC-USD Bitcoin USD 69,274.40 +4,731.29 (+7.33%)CRCL Circle Internet Group 80.29 +18.92 (+30.84%)CAVA CAVA Group, Inc. 84.50 +16.70 (+24.63%)COIN Coinbase Global, Inc. 184.77 +22.74 (+14.03%)MELI MercadoLibre, Inc. 1,776.03 -146.54 (-7.62%)PortfolioSign in to access your portfolioSign inTop gainersYOU Clear Secure, Inc. 44.72 +11.25 (+33.61%)CRCL Circle Internet Group 80.17 +18.80 (+30.63%)ECG Everus Construction Group, Inc. 132.54 +28.33 (+27.19%)CAVA CAVA Group, Inc. 84.37 +16.57 (+24.44%)NVTS Navitas Semiconductor Corporation 10.22 +1.96 (+23.73%)Top losersGDDY GoDaddy Inc. 77.98 -14.32 (-15.51%)DEO Diageo plc 86.44 -15.70 (-15.37%)VRRM Verra Mobility Corporation 15.99 -2.72 (-14.54%)FSLR First Solar, Inc. 208.91 -34.30 (-14.10%)LUNR Intuitive Machines, Inc. 16.41 -2.49 (-13.18%)Most activeNVDA NVIDIA Corporation 196.64 +3.78 (+1.96%)PLUG Plug Power Inc. 1.9407 +0.0307 (+1.61%)IBRX ImmunityBio, Inc. 10.14 -1.41 (-12.25%)INTC Intel Corporation 46.87 +0.75 (+1.63%)ONDS Ondas Inc. 10.65 +0.25 (+2.40%)Top economic eventsEarnings eventsMy earnings eventsEarnings events