Fintechs Urge New York to Rethink Buy Now, Pay Later Regulations

Industry group says proposed rules don't fit one-time, fixed-repayment loans

Published on Mar. 9, 2026

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Financial technology companies are calling on New York's banking regulator to reconsider a proposal that would establish licensing requirements and interest rate caps on buy now, pay later loans. The industry group argues that many of the rules, previously designed for open-end credit products like credit cards, don't properly address the unique structure of one-time, fixed-repayment buy now, pay later offerings.

Why it matters

The buy now, pay later industry has seen rapid growth in recent years, offering consumers an alternative to traditional credit cards. However, regulators are concerned about potential consumer protection issues and are moving to impose new rules on the sector. Fintechs argue the proposed New York regulations don't account for the differences between buy now, pay later and other credit products.

The details

In a comment letter to the New York Department of Financial Services, the Financial Technology Association (FTA) - which represents major buy now, pay later providers like Klarna and Block - said the proposed regulations don't properly fit the structure of one-time, fixed-repayment buy now, pay later loans. The FTA argued that provisions like licensing requirements and interest rate caps were previously designed for open-end revolving credit products like credit cards, and don't address the unique nature of buy now, pay later.

  • The proposed regulations were issued by the New York Department of Financial Services in 2026.

The players

Financial Technology Association

An industry group representing major fintech companies that offer buy now, pay later services, including Klarna and Block.

New York Department of Financial Services

The state banking regulator that issued the proposed buy now, pay later regulations.

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What they’re saying

“Many of those provisions—previously designed to protect consumers from hidden costs associated with open-end revolving products such as credit cards—aren't a good fit for one-time buy now, pay later loans with fixed repayment schedules.”

— Financial Technology Association (bloomberglaw.com)

What’s next

The New York Department of Financial Services will review the industry's feedback as it finalizes the buy now, pay later regulations.

The takeaway

The proposed New York rules highlight the challenges regulators face in crafting appropriate oversight for the rapidly evolving buy now, pay later industry, which offers a different credit model than traditional credit cards.