Overview
- NYDFS released a proposed rule that covers both zero‑interest pay‑in‑four plans and interest‑bearing purchase‑money BNPL loans offered to New York consumers.
- Non‑exempt providers must obtain a BNPL license, while state‑chartered banks and credit unions need DFS authorization and product‑specific category permissions; federally chartered institutions are exempt.
- Pricing is constrained by a 16% APR cap on interest‑bearing loans and a safe‑harbor late fee of up to $8 per violation, alongside restrictions on multiple fees for a single event and payment‑attempt limits.
- The proposal imposes TILA‑like pre‑ and post‑transaction disclosures, periodic statements with specific delivery timing, credit‑card‑style dispute and unauthorized‑use procedures, and bans cross‑defaults.
- Lenders would be required to conduct reasonable, risk‑based underwriting and comply with strict data‑consent rules that limit non‑servicing uses of consumer data, as DFS takes pre‑proposal comments through March 5 before a 60‑day formal comment period and a 180‑day post‑adoption effective timeline with transitional licensing.