New Protections For New Yorkers Using BNPL Financing Options

Buy-now, pay-later loans. It sure does sound inviting, doesn't it? Especially when the deal is for a product you really want. But is it really a good way to pay for a product?

Today, February 23, 2026, New York State Governor Kathy Hochul addressed those buy-now, pay-later loan deals.

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Governor Hochul announced proposed rules from the Department of Financial Services to protect New Yorkers using buy now, pay later financing options, including establishing a licensing and supervision framework for the loan providers, and protecting consumers through required disclosures, dispute resolution standards, limits on fees, and data privacy protections.

According to the announcement, these types of loans are popular across the nation, but the products are not subject to uniform rules regarding the disclosure of loan terms, data privacy, credit reporting, and fees that other consumer loans must adhere to.

Too many New Yorkers have learned the hard way that some ‘Buy Now, Pay Later’ products are designed to trip them up with junk fees and overly burdensome fine print instead of helping them build a stable financial future. These new nation-leading regulations ensure that lenders know we have clear disclosures, limits on fees and real oversight so families don't get pushed into a debt spiral while big financial companies cash in.- New York State Governor Kathy Hochul

Governor Hochul outlined that the proposed regulations will implement the law by:

• Establishing a licensing and supervision framework for any entities engaged in buy-now, pay-later activity in New York.
• Prohibiting excessive fees, including convenience charges, and limiting late fees and other types of penalty fees.
• Requiring lenders to make clear to New Yorkers whether loans will be reported to credit reporting agencies.
• Establishing rules for the timely resolution of consumer disputes
• Protecting consumer data from misuse or exploitation.

There will be a 60-day public comment period, and the law and regulation will take effect 180 days after the rule is adopted, followed by a transitional period for those already offering buy-now, pay-later loans in New York State.

For more information, visit Governor Hochul's website.