Bill Summary
The "Buy Now, Pay Later Protection Act of 2025" aims to amend the Truth in Lending Act and the Consumer Financial Protection Act of 2010 to enhance protections and oversight for buy now, pay later (BNPL) loans. The legislation defines BNPL loans as closed-end consumer loans repaid in no more than four interest-free installments without finance charges. Key amendments include:
1. **Inclusion in Truth in Lending Act**: BNPL loans will be explicitly incorporated into the Truth in Lending Act, ensuring that consumers receive the same protections as those with traditional credit products. This includes clear disclosures and rights associated with these loans.
2. **Consumer Rights**: The Act will extend consumer rights concerning claims and defenses to those who use BNPL loans, similar to those afforded to credit card users.
3. **Oversight**: The Consumer Financial Protection Bureau (CFPB) will gain the authority to supervise lenders offering BNPL loans, ensuring compliance with consumer financial protections.
Overall, this legislation aims to regulate and safeguard consumers engaging in BNPL transactions, which have grown in popularity, ensuring transparency and fairness in the lending process.
Possible Impacts
The "Buy Now, Pay Later Protection Act of 2025" aims to regulate Buy Now, Pay Later (BNPL) loans under the Truth in Lending Act and the Consumer Financial Protection Act of 2010. Here are three examples of how this legislation could affect people:
1. **Enhanced Consumer Protections**: With the application of the Truth in Lending Act to BNPL loans, consumers may benefit from clearer disclosures regarding loan terms, repayment obligations, and potential fees. This could help individuals make more informed financial decisions, reducing the risk of falling into debt traps associated with unclear or misleading loan agreements.
2. **Increased Accountability for Lenders**: The legislation introduces federal oversight for BNPL lenders, similar to traditional credit card issuers. This means that consumers would have a regulatory body to turn to if they experience issues with their BNPL loans, such as unfair lending practices or disputes over charges. This oversight could lead to a more transparent lending environment, potentially improving the overall reliability of BNPL services.
3. **Equal Treatment in Credit and Loan Rights**: By including BNPL loans in the same legal framework as credit cards, consumers would gain similar rights and defenses against lenders. For instance, if a consumer encounters a problem with a purchase made using BNPL financing, they may have the legal right to dispute charges just as they would with credit card transactions. This could empower consumers and provide additional avenues for recourse in the event of product defects or service issues.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6891 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 6891
To amend the Truth in Lending Act and the Consumer Financial Protection
Act of 2010 to apply certain protections and oversight to buy now, pay
later loans, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 18, 2025
Ms. Ross introduced the following bill; which was referred to the
Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the Truth in Lending Act and the Consumer Financial Protection
Act of 2010 to apply certain protections and oversight to buy now, pay
later loans, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Buy Now, Pay Later Protection Act of
2025''.
SEC. 2. APPLICATION OF THE TRUTH IN LENDING ACT TO BUY NOW PAY LATER
LOANS.
(a) In General.--The Truth in Lending Act (15 U.S.C. 1601 et seq.)
is amended--
(1) in section 103, by adding at the end the following:
``(ff) Buy Now, Pay Later Loan.--The term `buy now, pay later loan'
means a closed-end consumer loan for a retail transaction that--
``(1) is repaid in not more than 4 interest-free
installments; and
``(2) does not impose a finance charge.'';
(2) in section 127(a), by striking ``under an open end
consumer credit plan'' and inserting ``under an open end
consumer credit plan or a buy now, pay later loan'' each place
it occurs;
(3) in section 127(b), by striking ``under an open end
consumer credit plan'' and inserting ``under an open end
consumer credit plan or a buy now, pay later loan'' each place
it occurs;
(4) in section 170--
(A) in the section heading, by striking ``rights of
credit card customers.'' and inserting ``rights of
credit card customers and buy now, pay later loan
customers.'';
(B) in subsection (a)--
(i) by striking ``a card issuer who has
issued a credit card to a cardholder pursuant
to an open end consumer credit plan'' and
inserting ``a card issuer who has issued a
credit card to a cardholder pursuant to an open
end consumer credit plan or a creditor who has
provided a buy now, pay later loan to a
consumer'';
(ii) by striking ``in which the credit
card'' and inserting ``in which the credit card
or buy now, pay later loan'';
(iii) by striking ``honoring the credit
card'' and inserting ``honoring the credit card
or buy now, pay later loan'' each place it
occurs;
(iv) by striking ``provided by the
cardholder'' and inserting ``provided by the
cardholder or consumer'';
(v) by striking ``defenses against a card
issuer'' and inserting ``defenses against a
card issuer or creditor'';
(vi) by striking ``is the same person as
the card issuer'' and inserting ``is the same
person as the card issuer or creditor'';
(vii) by striking ``is controlled by the
card issuer,'' and inserting ``is controlled by
the card issuer or creditor,'';
(viii) by striking ``common control with
the card issuer'' and inserting ``common
control with the card issuer or creditor'';
(ix) by striking ``in the card issuer's
products'' and inserting ``in the card issuer's
or creditor's products'';
(x) by striking ``by the card issuer in
which'' and inserting ``by the card issuer or
creditor in which''; and
(xi) by striking ``using the credit card
issued by the card issuer'' and inserting
``using the credit card issued by the card
issuer or the buy now, pay later loan provided
by the creditor''; and
(C) in subsection (b)--
(i) by striking ``asserted by the
cardholder'' and inserting ``asserted by the
cardholder or consumer'';
(ii) by striking ``at the time the
cardholder first notifies the card issuer or
the person honoring the credit card of such
claim or defense'' and inserting ``at the time
the cardholder or consumer first notifies the
card issuer or creditor or the person honoring
the credit card or buy now, pay later loan of
such claim or defense''; and
(iii) by striking ``the cardholder's
account'' and inserting ``the cardholder's
account or the consumer's buy now, pay later
loan account'';
(5) in section 161--
(A) by striking ``in connection with an extension
of consumer credit,'' and inserting ``in connection
with an extension of consumer credit, including a buy
now, pay later loan,''
(B) in subsection (d), by striking ``an open end
consumer credit plan'' and inserting ``an open end
consumer credit plan or a buy now, pay later loan'';
and
(6) in section 171(a), by striking ``In the case of any
credit card account under an open end consumer credit plan''
and inserting ``In the case of any credit card account under an
open end consumer credit plan or buy now, pay later loan''.
(b) Rulemaking.--The Bureau of Consumer Financial Protection shall,
not later than 1 year after the date of this section shall issue such
rules as the Bureau of Consumer Financial Protection determines
necessary to carry out the amendments made by subsection (a).
SEC. 3. FEDERAL SUPERVISION OF BUY NOW, PAY LATER LOAN LENDERS.
Section 1024(a)(1) of the Consumer Financial Protection Act of 2010
(12 U.S.C. 5514(a)(1)) is amended--
(1) in subparagraph (D) by striking ``; or'' and inserting
a semicolon;
(2) in subparagraph (E) by striking the period at the end
and inserting ``; or''; and
(3) by adding at the end:
``(F) offers or provides to a consumer a buy now,
pay later loan as such term is defined in section 103
of the Truth in Lending Act.''.
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