New York establishes licensing and consumer protections for buy now pay later lenders

New York's financial regulator published new draft rules in February 2026 for buy now, pay later lending. The rules follow a law that Governor Kathy Hochul signed in May 2025.

Buy now, pay later services let shoppers split a purchase into several payments, usually without interest. These products have grown quickly, but they have offered fewer protections than credit cards.

The new rules require lenders to get a licence before operating in New York. Companies must give clear information about fees, and fees are capped. Customers will also get proper rights when they dispute a charge. Strong privacy rules mean companies need a customer's permission before using their personal data.