Last updated: September 2026. Techeconomix Editorial Team — researched using primary reporting from the Federal Reserve Bank of Richmond, the New York Department of Financial Services, and legal analysis from Norton Rose Fulbright, Holland & Knight, and Baker McKenzie. See “Sources & Methodology” at the end of this article.
Quick answer: With the federal Consumer Financial Protection Bureau stepping back from Buy Now, Pay Later (BNPL) enforcement in 2025, New York has moved to fill the gap with the nation’s first state-level BNPL licensing regime. The Richmond Fed estimates BNPL transaction volume reached roughly $70 billion in 2025, growing about 20% a year since 2021, and now representing about 1.1% of total credit card spending. Here’s what’s actually changing, and what it means whether you use BNPL or extend credit to people who do.
How Big Is BNPL, Really?
Buy Now, Pay Later lets shoppers split a purchase into installments, typically paid over weeks rather than years, often with no interest if paid on schedule. According to a February 2026 Federal Reserve Bank of Richmond economic brief, BNPL transaction volume has grown roughly 20% per year in real terms since 2021, reaching an estimated $70 billion in 2025 — about 1.1% of total US credit card spending. Separate legal analysis citing industry projections puts the global BNPL market at $560.1 billion in 2025, expected to grow to roughly $911.8 billion by 2030. About one in three US adults has used a BNPL service for at least one purchase, according to a 2025 survey cited in University of Baltimore Law Review research.
Photo by Anete Lusina via Pexels
The Federal Retreat
Under the Biden administration, the CFPB issued an interpretive rule in 2024 classifying BNPL lenders as credit-card issuers, bringing pay-in-four products under the Truth in Lending Act. That approach was short-lived: in May 2025, the CFPB said it would no longer prioritize enforcement of BNPL rules, effectively rescinding the interpretive rule’s practical force, according to Holland & Knight’s analysis. That left a regulatory gap that individual states have started to fill on their own.
New York’s First-in-the-Nation BNPL Licensing Regime
New York has moved furthest. Governor Kathy Hochul signed the BNPL Act in May 2025 as part of the state’s FY26 budget, introducing licensing requirements, fee limits, and data-privacy protections for BNPL lenders. The state’s Department of Financial Services published detailed proposed rules in March 2026 that would require BNPL providers, including interest-free “pay in four” products, to register with the state, undergo per-transaction underwriting, and provide disclosures similar in spirit to those required of credit card issuers — in some respects more stringent, according to Davis Wright Tremaine’s analysis, given the added data-governance and per-transaction underwriting requirements.
The proposed rules would take effect 180 days after final adoption, with a 45-day window for existing BNPL lenders to apply for a license and continue operating while their application is under review. Announcing the rules, Hochul said too many New Yorkers had “learned the hard way” that some BNPL products are designed to trip consumers up with junk fees and dense fine print rather than help them build financial stability.
Does BNPL Actually Threaten Financial Stability?
The Richmond Fed’s analysis is notably measured on this point: given BNPL’s current scale, outstanding debt, and observed default rates, the researchers found its impact on broader financial stability appears limited at present. BNPL users do tend to carry higher balances on other unsecured credit products, but the Richmond Fed found no clear evidence of a causal relationship between BNPL usage and rising unsecured debt — meaning it’s not yet clear whether BNPL is driving people into more debt or simply correlating with people who already carry more debt. The brief also notes BNPL’s welfare effects on consumers appear mixed rather than uniformly positive or negative.
What This Means If You Use BNPL
- More disclosure, eventually: If New York’s proposal is finalized, expect clearer upfront terms on payment dates, amounts, and the consequences of missing a payment — a preview of protections that could spread to other states.
- Underwriting checks: Some proposals would require BNPL providers to assess whether you can actually afford the loan before approving it, similar to affordability checks now required in the UK under new FCA rules effective July 2026.
- State-by-state patchwork, for now: With no federal rule in force, protections and requirements will vary by where you live until (or unless) other states or Congress act.
- It still shows up on your broader credit picture: Even where BNPL loans aren’t reported like traditional credit cards, lenders increasingly factor BNPL usage into underwriting decisions for other credit products.
How the US Compares Internationally
The UK offers a useful comparison point. The Financial Conduct Authority finalized new BNPL protections taking effect July 15, 2026, bringing BNPL arrangements formally within the FCA’s Consumer Duty framework. UK lenders will need FCA authorization to offer BNPL, must conduct affordability assessments before lending, and must direct struggling customers toward free debt advice. FCA deputy chief executive Sarah Pritchard said the goal is to let the BNPL sector continue thriving as an important credit source while ensuring no one is lent to who can’t realistically repay. The contrast is notable: the UK is implementing a single national framework, while the US remains a patchwork shaped by individual states like New York stepping in where federal regulators have stepped back.
Frequently Asked Questions
Is Buy Now, Pay Later regulated in the US?
Not comprehensively at the federal level as of 2026. The CFPB stepped back from BNPL enforcement in May 2025, and states including New York have since moved to create their own licensing and consumer-protection rules.
How big is the BNPL market?
US BNPL transaction volume reached an estimated $70 billion in 2025, about 1.1% of total credit card spending, according to the Federal Reserve Bank of Richmond. Global BNPL volume is projected to approach $911.8 billion by 2030.
What does New York’s BNPL law require?
New York’s BNPL Act, signed in 2025, establishes a state licensing regime for BNPL lenders, with proposed 2026 rules covering underwriting, fee limits, data privacy, and consumer disclosures.
Does BNPL usage hurt my credit score?
It depends on the lender and product; many BNPL providers don’t report standard pay-in-four loans to credit bureaus the way credit cards are reported, though this is an evolving area as regulation increases.
Sources & Methodology
This article draws on primary research and reporting from: the Federal Reserve Bank of Richmond’s February 2026 Economic Brief on BNPL; New York Department of Financial Services’ proposed BNPL regulations and related coverage from Consumer Finance Monitor, Davis Wright Tremaine, Holland & Knight, and Baker McKenzie; the UK Financial Conduct Authority’s July 2026 BNPL protections as reported by Yahoo Finance; and University of Baltimore Law Review analysis of CFPB BNPL policy. Figures and regulatory statuses reflect the most recently published information as of this article’s last-updated date and are subject to change as rulemaking proceeds.
This article is for informational purposes and does not constitute financial or legal advice. BNPL terms vary significantly by provider — review your specific agreement before using any installment payment product.
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