New York Proposes Licensing, Fee Rules for Buy Now, Pay Later Lenders

State financial regulator seeks to protect consumers from hidden fees and unaffordable loans.

Published on Feb. 23, 2026

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The New York Department of Financial Services has proposed new rules that would require buy now, pay later (BNPL) companies to obtain a license to operate in the state. The rules would also limit the fees BNPL lenders can charge consumers, such as late fees, and require them to assess a borrower's ability to repay before extending credit.

Why it matters

The proposed regulations aim to address concerns that some BNPL products have hidden fees and lend to consumers without properly evaluating their ability to make payments, potentially trapping them in debt. As the BNPL industry continues to grow, states are seeking to establish guardrails to protect consumers.

The details

Under the New York proposal, BNPL companies would need to obtain a license from the state's financial regulator in order to offer their services to New York consumers. The rules would also limit the fees BNPL lenders can charge, such as late fees, and require them to evaluate a borrower's creditworthiness and ability to repay before extending credit.

  • The New York Department of Financial Services proposed the new BNPL rules on February 23, 2026.

The players

New York Department of Financial Services

The state agency responsible for regulating and supervising the financial services industry in New York.

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What’s next

The proposed rules will be subject to a public comment period before the New York Department of Financial Services finalizes them.

The takeaway

The new regulations aim to bring more oversight and consumer protections to the rapidly growing buy now, pay later industry, which has faced criticism for potentially trapping users in debt with hidden fees and insufficient credit checks.