N.Y. Banking Law § 746: Consumer protections

* § 746. Consumer protections. 1. A buy-now-pay-later lender shall

disclose or cause to be disclosed to consumers the terms of

buy-now-pay-later loans, including, without limitation, the cost, such

as interest and fees, repayment schedule, the means by which a consumer

may dispute billing practices, whether the transaction will or will not

be reported to a credit reporting agency, and other material conditions,

in a clear and conspicuous manner. Disclosures shall comply with

applicable federal regulations, including but not limited to regulation

Z of title I of the Consumer Credit Protection Act.

2. Subject to regulations to be promulgated by the superintendent, a

buy-now-pay-later lender shall, before providing or causing to be

provided a buy-now-pay-later loan to a consumer, perform, or cause to be

performed, reasonable risk-based underwriting. A buy-now-pay-later

lender shall maintain or cause to be maintained policies and procedures

for underwriting buy-now-pay-later loans, and shall disclose factors

considered in such underwriting process, in a clear and conspicuous

manner to the consumer. No buy-now-pay-later lender shall collect,

evaluate, report, or maintain in the file on a borrower the credit

worthiness, credit standing, or credit capacity of members of the

borrower's social network for purposes of determining the credit

worthiness of the borrower; the average credit worthiness, credit

standing, or credit capacity of members of the borrower's social

network; or any group score that is not the borrower's own credit

worthiness, credit standing, or credit capacity.

3. A buy-now-pay-later lender shall maintain or cause to be maintained

policies and procedures for maintaining accurate data that may be

reported to credit reporting agencies. No buy-now-pay-later lender shall

share consumer data in a manner inconsistent with this article and

regulations promulgated thereto.

4. A buy-now-pay-later lender shall provide or cause to be provided

refunds or credits for goods or services purchased in connection with a

buy-now-pay-later loan, if the consumer requests and is entitled to a

refund, in a manner that is fair, transparent, and not unduly burdensome

to consumers. A buy-now-pay-later lender shall maintain or cause to be

maintained policies and procedures to provide such refunds or credits.

Such policies and procedures shall be fair, transparent, and not unduly

burdensome to the consumer. A buy-now-pay-later lender shall disclose or

cause to be disclosed to consumers, in a clear and conspicuous manner,

the process by which they can obtain refunds or credits for goods or

services they have purchased in connection with a buy-now-pay-later

loan.

5. A buy-now-pay-later lender shall resolve or cause to be resolved

disputes in a manner that is fair and transparent to consumers. A

buy-now-pay-later lender shall create or cause to be created a readily

available and prominently disclosed method for consumers to bring a

dispute to the buy-now-pay-later lender. A buy-now-pay-later lender

shall maintain policies and procedures for handling consumer disputes.

The superintendent may promulgate rules and regulations regarding

treatment of unauthorized use, so that consumers are liable for use of

buy-now-pay-later loans in their name only under circumstances where

such liability would be fair and reasonable. A buy-now-pay-later lender

shall apply to buy-now-pay-later loans the dispute rights and

unauthorized charges requirements that apply to credit cards under the

Truth in Lending Act, 15 U.S.C. § 1643, 1666, 1666a, 1666i, regardless

of whether such law applies to buy-now-pay-later loans or whether the

buy-now-pay-later lender offers a credit card within the scope of such

law.

6. A buy-now-pay-later lender may use, sell, or share the data of a

consumer, other than in connection with the making of a particular

buy-now-pay-later loan to the consumer, only with the consumer's

consent. A buy-now-pay-later lender shall disclose or cause to be

disclosed to a consumer in a clear and conspicuous manner how such

consumer's data may be used, shared, or sold by the buy-now-pay-later

lender before obtaining such consumer's consent and also shall disclose

or cause to be disclosed to such consumer in a clear and conspicuous

manner how such consumer may subsequently withdraw consent to such use,

sharing, or sale. The superintendent, in their discretion, may by

regulation prohibit certain uses of consumer data. A buy-now-pay-later

lender shall maintain policies and procedures regarding its use, sale,

and sharing of consumers' data. Nothing in this subdivision shall

preclude a buy-now-pay-later lender from using information in accordance

with the Fair Credit Reporting Act or furnishing credit reporting data

to a credit reporting agency.

7. Any buy-now-pay-later loan made by a person not licensed or

authorized under this article, other than an exempt organization, shall

be void, and such person shall have no right to collect or receive any

principal, interest or charge whatsoever.

8. Nothing in this section shall be construed to limit the obligations

of a buy-now-pay-later lender to comply with any other applicable laws

or regulations. Any protections, rights and remedies provided in this

section to a consumer with respect to an agreement with a

buy-now-pay-later lender shall be intended to supplement and not be

exclusive of any protections, rights and remedies otherwise available

pursuant to any other law or regulations.

* NB Effective upon the one hundred eightieth day after the

promulgation of rules and/or regulations by the department of financial

services to effectuate certain provisions (see Ch. 58 of 2025, Part Y, §

13)