Buy Now, Pay Later Protection Act of 2025

This legislation aims to bring buy now, pay later (BNPL) loans under the purview of existing consumer protection laws. It specifically amends the Truth in Lending Act (TILA) to define a BNPL loan as a closed-end consumer loan for retail transactions, repaid in no more than four interest-free installments, and without a finance charge. This definition is crucial for applying the subsequent protections and ensuring clarity in regulation. A key provision of the bill is the extension of various TILA consumer rights to BNPL customers, granting them the ability to assert claims and defenses against creditors, similar to the protections afforded to credit card holders. This means consumers can dispute charges or issues directly with the BNPL provider, enhancing their financial safeguards. The bill also mandates that the Bureau of Consumer Financial Protection (CFPB) issue necessary rules within one year to implement these new protections. Furthermore, it expands federal oversight by amending the Consumer Financial Protection Act of 2010, subjecting entities that offer or provide buy now, pay later loans to the supervisory authority of the CFPB, ensuring these lenders are regulated and examined.