Two states have passed laws that require buy now, pay later lenders to be licensed: New York, in its 2025 budget, and Illinois, whose law took effect on June 25, 2026. New Jersey lawmakers introduced a "Buy Now Pay Later Act" on October 19, 2026. In Congress, three bills would bring these loans under federal credit rules, but none has had a committee vote.
Buy now, pay later (BNPL) plans split a purchase into a few payments, often four payments over six weeks with no interest. Because many plans have four or fewer payments and no finance charge, they have generally fallen outside the federal Truth in Lending Act rules that apply to credit cards. State licensing laws are one way that is changing.
New York: law passed, rules still pending
New York's law (Banking Law Article 14-B, Part Y of Chapter 58 of 2025) requires BNPL lenders to be licensed by the Department of Financial Services. It does not take effect until 180 days after the department adopts rules. The department published its proposed rule (3 NYCRR Part 423) on July 15, 2026, and the comment period closed on September 14, 2026. The department has said the rules would limit late fees and other penalty fees, prohibit excessive fees, require lenders to say whether loans are reported to credit bureaus, set dispute rules and protect consumer data. As of October 20, 2026, the final rule had not been adopted.
Illinois: in effect
The Illinois Buy-Now-Pay-Later Loan Consumer Protection Act (SB 3561, Public Act 104-0475) took effect when it was signed on June 25, 2026. It requires BNPL lenders to be licensed, to underwrite loans with a look at the borrower's ability to repay, to give clear disclosures of costs and of whether a loan will be reported to a credit bureau, and to handle disputes fairly. Loans are subject to the 36% rate cap in the state's Predatory Loan Prevention Act.
State bills
| Jurisdiction | Bill | Status | Last action | What it does (our summary) |
|---|---|---|---|---|
| New York | S 3008 / A 3008 | Enacted: Chapter 58 of 2025, signed May 9, 2025 | 2025-05-09 | Budget law, Part Y: adds Article 14-B to the Banking Law, requiring buy now, pay later lenders to be licensed by the Department of Financial Services and letting it set rules on fees, disclosures, disputes and data. Takes effect 180 days after the department's rules are adopted. |
| Illinois | SB3561 | Enacted: Public Act 104-0475, effective June 25, 2026 | 2026-06-25 | Buy-Now-Pay-Later Loan Consumer Protection Act: licensing by the Department of Financial and Professional Regulation, underwriting that considers ability to repay, required disclosures (including whether loans are reported to credit bureaus), dispute rights, a $50,000 surety bond and the 36% rate cap of the Predatory Loan Prevention Act. |
| New Jersey | A5664 | Introduced Oct 19, 2026 | 2026-10-19 | "Buy Now Pay Later Act"; would regulate buy now, pay later lenders. Bill text was not yet available through LegiScan when we checked; summary from the bill synopsis. |
| New York | A06757 | Not enacted | 2026-01-07 | Stand-alone bill to license buy now, pay later lenders (similar to the provisions later enacted in the 2025 budget). |
| New York | S04606 | Not enacted | 2026-01-07 | Senate version of A 6757. |
| New York | A04918 | Not enacted | 2026-01-07 | Would apply New York's interest rate limits to a range of financing, explicitly including buy now, pay later transactions. |
| New York | S01726 | Not enacted | 2026-01-07 | Senate version of A 4918. |
Federal bills
| Jurisdiction | Bill | Status | Last action | What it does (our summary) |
|---|---|---|---|---|
| Congress | SB3561 | Not enacted | 2025-12-18 | Buy Now, Pay Later Protection Act of 2025: would apply Truth in Lending Act protections and CFPB oversight to buy now, pay later loans. |
| Congress | HB6891 | Not enacted | 2025-12-18 | House version of S. 3561. |
| Congress | HB9275 | Not enacted | 2026-06-11 | Buy Now Pay Later Consumer Protection Act of 2026: would treat buy now, pay later loans as credit cards under the Truth in Lending Act. |
| Congress | SJR134 | Motion to proceed rejected, May 13, 2026 | 2026-05-13 | Would have overturned the CFPB's withdrawal of its rule treating buy now, pay later digital accounts like credit cards under Regulation Z. |
| Congress | HB10184 | Ordered reported by committee, Sept 16, 2026 | 2026-09-16 | Broad CFPB reform bill; Section 303 would require a GAO study of buy now, pay later services. |
| Congress | HB5083 | Not enacted | 2025-09-02 | Would require a CFPB and FTC study of using more data in credit scores, including buy now, pay later payment history. |
| Congress | HB5683 | Not enacted | 2025-10-03 | Military consumer protection task force; would include study of buy now, pay later risks to servicemembers and veterans. |
| Congress | HB8694 | Not enacted | 2026-05-07 | Would bar short-term buy now, pay later loans for buying certain semiautomatic firearms. |
Status as of October 20, 2026, from LegiScan. Summaries are ours, based on the latest bill text. New York's budget bill passed as S 3008-C, which replaced its Assembly twin, so it appears once.
What changed in our count
A keyword search of 2025 and 2026 bills returned 17 records. After reading the texts, we count 15 bills: 7 at the state level (2 enacted) and 8 in Congress. We merged New York's Assembly and Senate budget bills into one law and dropped a California bill on immigration enforcement at retail stores whose current text does not mention buy now, pay later. Of the federal bills, three (S. 3561, H.R. 6891 and H.R. 9275) are mainly about BNPL; the others mention it as one part of a broader bill.
Why it matters
BNPL use has grown fast. In the Federal Reserve's 2025 household survey, 16.5% of adults said they had used a BNPL service in the past year, and in its 2025 Survey of Consumer Finances, 12% of families had a BNPL balance. Licensing laws give state regulators the power to examine lenders, take complaints and limit fees. Whether BNPL loans show up on credit reports, and how they are scored, is still uneven across lenders and bureaus.
What you can do
- Keep track of every plan you have open. Several small plans due at different times can be easy to lose track of.
- Check the late fee and whether the plan charges interest. Longer plans for bigger purchases often carry an APR.
- Ask whether the lender reports to credit bureaus. Some report on-time and late payments, some report only problems, and some do not report.
- If you have a problem, file a complaint with the lender first, then with your state regulator. In New York that is the Department of Financial Services, and in Illinois the Department of Financial and Professional Regulation.
Official bill pages
- New York S 3008 / A 3008: official bill page
- Illinois SB3561: official bill page
- New Jersey A5664: official bill page
- New York A06757: official bill page
- New York S04606: official bill page
- New York A04918: official bill page
- New York S01726: official bill page
- Congress SB3561: official bill page
- Congress HB6891: official bill page
- Congress HB9275: official bill page
- Congress SJR134: official bill page
- Congress HB10184: official bill page
- Congress HB5083: official bill page
- Congress HB5683: official bill page
- Congress HB8694: official bill page
Source
Bill status and texts: LegiScan (data licensed under CC BY 4.0, LegiScan LLC), search of 2025 and 2026 sessions, retrieved October 20, 2026, with each bill's latest text read by us. New York rulemaking: Department of Financial Services, proposed 3 NYCRR Part 423 and its February 23, 2026 announcement. Usage figures: Federal Reserve SHED 2025 (our calculation, see our BNPL use page) and Federal Reserve, Changes in U.S. Family Finances from 2022 to 2025. Bill texts are public records. Our table is available under CC BY 4.0. Credit "My Credit Guide (mycreditguide.org)".
Steven Reynolds, "Buy Now, Pay Later Laws and Bills," My Credit Guide, October 20, 2026, https://mycreditguide.org/data/buy-now-pay-later-laws/.