Kathy Hochul, the Governor of New York, has signed legislation that aims to regulate Buy Now Pay Later (BNPL) providers.
The legislation seeks to make it easier for consumers to cancel subscriptions, require platforms to post return and refund policies, make “surveillance price” more transparent, and crack down on overdraft fees.
Surveillance pricing is the practice of merchants using individual data to set prices, a nefarious activity.
The state will also launch a new regulatory regime to supervise and license BNPL providers.
The legislation is part of the FY26 Enacted Budget that hopes to protect consumers while guarding against scams or exploitative practices.
Governor Hochul said the new laws are about “fairness, transparency, and accountability, and will help consumers save money and spend it wisely.”
Phil Goldfeder, CEO of the American Fintech Council, has issued a statement on the new law, calling it an important step forward in “pragmatic, consistent regulation of BNPL, including the requirement that every transaction be underwritten.”
“Many provisions are consistent with AFC’s existing BNPL standards, which represent best practices in the industry. But while some provisions are a step in the right direction, other language has the potential for unintended consequences that would limit consumer choice, decrease responsible access to credit, and create an uneven playing field,” said Goldfeder. “Responsible BNPL products are fundamentally different credit products that provide important options for New Yorkers, who increasingly seek more flexible and transparent credit alternatives offering clear and upfront terms without revolving debt. In some cases, pay-over-time products offer interest-free financing without any late fees or hidden charges. Unfortunately, the definitions of BNPL in this new law are not clear, possibly capturing additional products, and the language would improperly apply regulations designed specifically for credit cards to the emerging pay-over-time sector.”
